Inflation may hit 3.3 pct with higher fuel, auto taxes: DOF


Posted at Jan 27 2017 01:39 PM

MANILA - Inflation could quicken to 3.3 percent once taxes on fuel and cars are increased under President Rodrigo Duterte’s reform plan, finance officials said Friday.

Duterte is looking for additional revenue sources to offset a reduction in income taxes that is expected to bring relief to the middle class.

The government hopes to impose higher duties on petroleum products and automobiles in 2018, Department of Finance spokesperson Paola Alvarez told reporters.

While inflation could pick up by as much as 1.5 points, a 3.3-percent increase in consumer prices is still within the 2 to 4 percent target of the Bangko Sentral ng Pilipinas, finance undersecretary Karl Kendrick Chua said.

“Gusto namin simpler, fairer and more efficient ang tax system natin,” Chua said.

(We want a simpler, fairer and more efficient tax system.)

The government will revive “pantawid pasada” or subsidies for public utility drivers to offset the impact of higher fuel prices, he said.

Assistance will also be given to jeepney drivers to switch to more fuel-efficient engines, he added.