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Senate calls inquiry into fuel excise suspension

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SENATOR Sherwin T. Gatchalian has filed a resolution seeking an inquiry into the potential impact of suspending the fuel excise tax on inflation, which hit 6.7% in September.

Senate Resolution No. 917 was filed Oct. 10 following Malacañang’s decision to suspend the scheduled increase of oil excise tax in 2019. The Senate hearing is scheduled for Wednesday.

Republic Act No. 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) law imposed a fuel excise tax increase of P2.50 per liter this year, and will raise the levy by P2 and P1.50 per liter in 2019 and 2020.

The law also provides a suspension provision on the scheduled increase of fuel excise taxes if the average Dubai crude benchmark in the three months prior to the scheduled increase hits or exceeds $80 per barrel.

Mr. Gatchalian, chair of the Senate committee of economic affairs, has been conducting public hearings on the tax reform law since February to monitor its implementation of the social mitigating measures and its inflationary impact.

He said in his resolution that inflation continued to rise to 6.7% in September despite the government’s efforts “”to mitigate the inflationary effects of the TRAIN law.”

He also noted that other additional inflationary pressures are expected to come in the next months, such as higher global oil prices, minimum wage hikes, higher public transportation fares, weather disruptions, and the further weakening of the peso.

“It is imperative for this inquiry to ventilate the issues related to the effective implementation of the said social mitigating measures, not only with respect to the targeted beneficiaries, but also to the rest of these families who see themselves as poor,” Mr. Gatchalian said.

He also said the possible duration of the fuel excise tax suspension next year will be discussed in the Senate hearing.

The Department of Finance (DoF) has estimated that about P41 billion in revenue will be lost if the government suspends the second tranche of the fuel excise tax next year. Meanwhile, the Department of Budget and Management (DBM) has said the increase in fuel vouchers for public utility jeepney franchise holders will be put on hold following the suspension.

Malacañang has yet to issue to a formal order suspending the fuel excise tax under the TRAIN law next year. — Camille A. Aguinaldo

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