Laban Konsyumer questions 12% VAT on fuel products on top of TRAIN excise tax

MANILA – Consumer group Laban Konsyumer Inc. (LKI) is questioning the additional 12 percent value-added tax imposed on fuel products on top of the excise tax under the Tax Reform for Acceleration and Inclusion (TRAIN) Law.

LKI president Victorio Dimagiba said on Tuesday that the group has filed a request for the government to explain the alleged double taxation.

“LKI request for a definitive ruling with the Bureau of Internal Revenue (BIR) on the collection of 12 percent value-added tax on the excise tax is pending with the Law Division of the BIR as of July 16, 2019,” he said in a mobile message to reporters.

Starting 2019, the law further raised the excise taxes on diesel a total of P4.50 and gasoline by P9.00.

Dimagiba noted, however, that the government is still collecting another 12 percent through VAT.

“February this year, I raised the matter why VAT of 12 percent is collected on the excise tax on fuels,” he said.

“As you know, excise taxes are collected because of TRAIN Law. Little did we know another 12 percent is added,” he said.

Dimagiba noted that year-to-date, the excise taxes on diesel products have reached P4.50 per liter but consumers are currently paying P5.05 or 54 centavos more per liter.

“I have to go by the request for a definitive BIR ruling to avail of the process of an appeal to the Court of Tax Appeal in the event of a negative ruling,” he said.

“The issue can save consumers almost 50 centavos per liter across the fuels. Sayang din kung tama tayo,” he added.

The Department of Finance said it has responded to LKI several months ago, concerning the consumer group’s “computational errors.”

“I haven’t seen Laban Konsyumer’s recent comment. There was, however, a previous query from a few months back that we responded to in detail. The BIR and DOE (Department of Energy) also responded in kind,” Finance Assistant secretary and spokesperson Antonio Lambino II said.

“We pointed out simple computational errors in response to the previous comment received from Laban Konsyumer.”

In letter dated March 29, 2019, Lambino told Dimagiba that the gross selling price already includes the excise taxes.

“The term ‘gross selling price’ means the total amount of money or its equivalent which the purchaser pays or is obligated to pay to the seller in consideration of the sale, barter, or exchange of the goods or properties, excluding the value-added tax,” Lambino noted, citing the Tax Code.

“The excise tax, if any, on such goods or properties shall form part of the gross selling prices,” he said.

“We have found no evidence of over-collection of VAT. We concur with the responses sent to you by the BIR dated January 29, 2019 and the DOE dated March 21, 2019…that there are no errors in the computation,” Lambino added.

LKI is also pushing for the proposed circular requiring oil companies to “unbundle” the details of price adjustments of petroleum products for the public to know why fuel prices are going up.

“We are one that had lobbied with DOE to issue the unbundling since 2018, and in congressional hearings…,” Dimagiba noted.

PIP counts as members Chevron Philippines Inc., Isla LPG Corp., Petron Corp., Pilipinas Shell Petroleum Corp., PTT Philippines Corp., and Total Philippines Corp.

Data from the DOE showed the net adjustments in fuel prices totaled P5.15 for gasoline, P3.30 for diesel, and P1.75 for kerosene in the year-to-date. (GMA News)


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