Fuel prices continue to soar and this problem is not isolated here in the country. In the US for example, the October 2021 average gasoline price is $ 3.42/ gallon (3.8 liters). That roughly translates to PhP 45.00 per liter of gasoline.
By comparison, fuel prices here in NCR are PhP 15.00 to PhP 20.00 more expensive, largely thanks to the excise taxes being levied on fuel. These additional taxes are part of the TRAIN Law that was signed in 2017.
Senator Grace Poe wants to call a time out from these additional fuel taxes.
In a recent proposal, Poe filed Senate Bill (SB) 2445 which seeks to suspend the collection of excise taxes on gasoline and diesel if the average price of Dubai crude oil hits $80 per barrel for three consecutive months.
The suspension of the excise tax will immediately bring down the cost by at least PhP 10.00/ liter for gasoline and PhP 6.00/liter for diesel.
“The rising cost of fuel is certain to have a spillover effect on the cost of other products, especially food which accounts for a big chunk of a household's expenses. Such will aggravate poverty and hunger among our people. If the government cannot substantially provide for its people, then at the very least, it must do all it can to ease their burden,” said Senator Poe.
Poe's bill proposes to amend section 148 of the National Internal Revenue Code by allowing the suspension of excise taxes on gasoline and diesel.
The Tax Reform for Acceleration and Inclusion (TRAIN) law allowed for the suspension of the scheduled increase in the excise tax on fuel when the three-month average Dubai crude oil prices based on the Mean of Platts Singapore hits US$ 80.00 per barrel or more.
However, the Department of Finance (DOF) said the government stands to lose PhP 131-billion from the suspension of the excise tax on gasoline and diesel, PhP 24.7-billion of which represents its projected foregone revenue from the tax and PhP 106.7-billion in incremental revenues.
Should the government sacrifice losing billions in tax revenue in order to give motorists more breathing room when gassing up? Let us know in the comments
