MANILA - The Philippine government stands to lose some P138.8 billion in revenues this year alone if fuel taxes are waived, while long-term losses can go up to more than P1 trillion, the Department of Finance said on Tuesday.
The DOF issued the statement as more sectors and lawmakers called for the suspension of excise taxes on fuel amid skyrocketing pump prices.
DOF spokesperson Paola Alvarez said House Bill No. 10488, which aims to suspend fuel taxes from June to November 2022, could lead to P48.7 billion in revenue losses.
Senate Bill No. 2445, which seeks to suspend fuel taxes from June to December this year, meanwhile could lead to P69.3 billion in losses, she said.
"Overall, [kapag] sinsupende natin lahat, including VAT... excise tax ng lahat ng klase ng fuel, mawawalan tayo ng P138.8 billion in one year or 0.6 percent [of our] GDP," Alvarez explained in a televised briefing.
(Overall, if we suspend all of it, including VAT and excise taxes on all types of fuel, we will lose P138.8 billion in a year.)
In the long term, she said, the government could lose up to P1.5 trillion until 2032.
WHAT IF WE JUST LOWER EXCISE TAXES?
Lowering excise taxes will also cause revenue losses and affect some government programs, she said. The Department of Budget and Management earlier also said this.
The DOF official said that instead of waiving fuel taxes, it was better for the government to offset the price increases through subsidies and discount vouchers for transport drivers and fisherfolk, some P3 billion of which had already been released.
Alvarez noted that higher income households account for nearly 49 percent of fuel consumption, while lower-income households account for only 13.8 percent.
Suspending fuel excise taxes will affect the government's fuel subsidy program, as well as social services like Pantawid Pamilya, Alvarez said. Even the country's infrastructure program will be affected, she said.
Alvarez meanwhile said the fuel subsidy for transport and agricultural workers should be enough as the budget for this has been increased to P6.1 billion.
The DOF official said the spike in fuel prices and its effects on the economy were "temporary."
On Tuesday, most gas companies are due to increase the price of diesel by P13.15 per liter and gasoline by P7.10 per liter.
Since the start of the year, diesel prices have increased by P30.65 per liter, gasoline by P20.35 per liter, and kerosene by P21.90, based on data from the Department of Energy and the most recent price increase.