FINANCE secretary Benjamin Diokno yesterday said suspending the collection of excise taxes on petroleum products would cause “huge damage” to the economy.
House Speaker Martin Romualdez has asked oil companies to slash oil prices amid the soaring fuel prices. He also recommended the suspension of fuel excise tax collections to President Ferdinand Marcos Jr.
But Diokno warned that the government would lose billions in revenue if it suspends value added tax (VAT) and excise tax on fuel.
“Unang-una ‘pag tinuloy mo ‘yan, ang mawawala sa gobyerno — sabihin ko na ang numero — P72.6 billion for the fourth quarter lang ‘yan, last quarter ng 2023,” Diokno told TeleRadyo Serbisyo.
“Kung kabuuan naman — sa whole year of 2024 — aabutin ng P280.5 billion ang mawawala sa gobyerno.”
The finance secretary said that would translate to lost funding for government programs, including social safety nets.
Suspending taxes on fuel would also have a negative impact on the country’s debt, credit rating, and programs, Diokno added.
“Napakalaki ng negative consequences niyan sa ekonomiya kasi naka-programa na ‘yan sa gobyerno,” he said.
‘Targeted assistance’ to Filipinos most affected by crisis
Diokno noted that when oil prices skyrocketed last year because of Russia’s invasion of Ukraine, the government did not suspend tax collections because of the potential loss to collections.
Instead, he said, the government provided targeted assistance like fuel subsidies to farmers and drivers, which he called the “best strategy” recommended by the International Monetary Fund.
“Pagka binawasan mo iyan, tinanggal mo iyan, ‘pag nag-normalize ‘yung [presyo] hindi naman madaling magbalik eh, ‘yun ang malaking kawalan sa gobyerno,” he said, arguing that it would be mostly the rich who would benefit from suspending oil taxes.
Asked whether he would be willing to oppose a proposal to suspend fuel excise tax collection even if it is backed by Romualdez, Diokno replied: “As a member of the Cabinet, it is my responsibility to give the best advice to the president. ‘Di naman puwedeng ‘yes man’ ka lang.” (ABS-CBN News)
