SENATOR Aquilino L. Pimentel III has filed a bill restoring the value-added tax (VAT) exemptions on petroleum products.
Senate Bill No. 2163, filed on Jan. 21, amends Section 109 of the National Internal Revenue Code (NIRC) in order to include the importation or sale of petroleum products as among the transactions exempted from VAT.
Mr. Pimentel, who chairs the Senate committee on trade, commerce and entrepreneurship, noted that prices of fuel and other commodities have steadily risen since the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) law. While the high prices were anticipated, the senator also pointed out that the sharp rise in global oil prices was unexpected.
“As a result, Filipinos have had to contend with higher prices on both basic goods and transport,” he said in his explanatory note.
“As a means of easing the burden on the public, this bill proposes to exempt petroleum products from value-added tax. So as to retain some revenue for the government, excise tax on petroleum products shall still be imposed,” he added.
In 2005, Republic Act No. 9337 or the expanded VAT law gave petroleum products their VAT exemption under the NIRC. As a mitigating measure, the law reduced the excise tax on diesel, kerosene, and bunker fuel oil.
In Republic Act No. 10963 or the TRAIN law, the importation of fuel, goods and supplies used for international shipping or transport operations by persons engaged in such businesses is VAT-exempt.
Meanwhile, the government continued the implementation of the scheduled increase of excise taxes on fuel in 2019 as prescribed in the TRAIN law. Excise taxes on gasoline and diesel rose to P9 per liter and P4.50 per liter, respectively.
Several measures have also been filed in the Senate seeking VAT exemptions for electricity generation, transmission and distribution, system loss charges, and construction materials for social housing, among others. Other bills called for the reduction of the VAT rate from the present 12% to 10%.
The Department of Finance had yet to reply to requests for comment at deadline time. — Camille A. Aguinaldo

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