MANILA – The Duterte administration’s economic managers will find a way to heed the President if he decides not to implement the second round excise tax on petroleum products, an official of the Department of Finance said Monday.
The recommendation will be discussed by the Cabinet today.
On Nov. 29, the Development Budget Coordination Committee (DBCC) recommended to the President that the excise tax on fuel be raised for the second time as provider for by Republic Act 10963, or the Tax Reform for Acceleration and Inclusion (TRAIN) law.
“This will be taken up during the Cabinet meeting tomorrow,” Finance assistant secretary Antonio Lambino II said on Monday.
Asked what will the DOF do if Duterte rejects the economic team’s proposal, Lambino said, “We will have to find a way to follow the President’s directive.”
“Even though the law states $80 [per barrel] and above, we will have to find a way to follow the directive of the President,” he said.
The TRAIN law imposed a P2.50 per liter excise tax on diesel from zero and hiked the levy on gasoline to P7.00 per liter.
The law provides that starting 2019, the excise taxes will go up by P2.00 for a total of P4.50 on diesel and P9.00 on gasoline.
The increase, however, may be temporarily suspended if the average price of Dubai crude reach or exceed $80 per barrel on average for three months before the next round of excise tax hikes is implemented.
If Duterte decides to suspend the implementation of the second tranche of fuel excise tax hike as earlier approved by his economic manager, Lambino said the DOF will seek the advice of its legal team.
Suspending the second round of excise tax hike is estimated to have a negative impact of P43 billion on revenue.
“That being said...Mahalaga isipin anong paggagastusan ng P43 billion na yun. Kung kailangan talagang i-suspend, handa ang economic managers na hanapan ito,” Lambino said in a separate interview on GMA News’ “News to Go” on Monday.
The economic managers decided to take back their earlier recommendation to suspend the second round of fuel excise tax hike next year “in light of the favorable outlook in world oil prices.”
Prices of Dubai crude have gone down 14 percent from an average of $79 per barrel in October to $68 per barrel so far in November, according to the DOF. (With GMA News/PN)