DBM warns of impact of suspending fuel excise taxes on government services

Job Manahan and Pia Gutierrez, ABS-CBN News

Posted at Mar 09 2022 09:27 PM

Fuel nozzles hang  ABS-CBN News
Fuel nozzles hang at a gasoline station in Manila on February 26, 2022. George Calvelo, ABS-CBN News

MANILA- The budget department on Wednesday said suspending excise taxes on petroleum products will significantly affect the government’s delivery of social services. 

This, following mounting calls from several groups for government to halt the collection of fuel excise taxes to help cushion the impact of rising oil prices.

DBM Secretary Tina Rose Canda said that while the proposed suspension of excise taxes will benefit the transport sector, it will result in government being unable to fund some of its social services and programs. 

Video from PTV

"Yung magiging epekto nito is matutulungan natin ang transport sector and probably agriculture. Pero ang tatamaan sa pagtanggal ng excise at sa VAT will be yung other social services natin," Canda explained in a televised briefing.

(Deferring excise taxes and VAT will benefit our transport sector and probably agriculture. But it will affect other social services.)

"Ang education, mawawalan ng pondo para sa K-12. Hindi lahat yan mapopondohan. Ang DOH, maaapektuhan ang kanilang health facilities, plus yung kanilang medical assistance. Tapos yung DSWD, ang tatamaan naman sa kanila ay yung assistance to individuals in crisis situations,” the official added.

(For the education sector, the funds for the K-12 program will be affected. Not all of its projects will have funding. For the DOH, their health facilities and medical assistance will be affected. The DSWD's assistance to individuals, meanwhile, will be affected too.)

Because of these, the excise tax and VAT moratorium should be discussed thoroughly, Canda said.

Deferring excise taxes would cut P6 per liter off the price of diesel and P10 off for gasoline, and P5 off for kerosene, based on the TRAIN Law. This is on top of the P12 percent VAT. 

The finance department late last year opposed calls to suspend fuel excise taxes saying foregoing the revenues from the measure would be detrimental to the country's economic recovery.

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