Ayuda or bawas buwis? Lawmaker says tax suspension faster

ABS-CBN News

Posted at Mar 16 2022 10:33 AM

A gas station clerk receives a jeepney driver’s payment in coins at a station in Manila on March 15, 2022. Motorists and commuters continue to struggle as oil prices continue to skyrocket. George Calvelo, ABS-CBN News
A gas station clerk receives a jeepney driver’s payment in coins at a station in Manila on March 15, 2022. Motorists and commuters continue to struggle as oil prices continue to skyrocket. George Calvelo, ABS-CBN News

MANILA - Which is better - suspending excise taxes on select oil products or give out cash assistance?

According to Marikina Rep. Stella Quimbo, suspending excise taxes could be done immediately compared to cash doleouts, which could take months. 

She noted government has "so much unused funds" for cash assistance. 

"'Di tayo magaling magdistribute ng ayuda (We're not good in distributing aid) that's why the Committee on Ways and Means said let’s just suspend the collection of taxes because it’s the same relief," she told ANC's Headstart.

"Pag sinabi mo kasing magbigay ng ayuda, sinasabi mong: 'You face the price increase and then I will reimburse you with ayuda.' Whereas if you suspend taxes, nandun na yung ayuda mo because you don’t pay the tax anymore."

(When you say you'll dole out aid, you're saying face the price increase and then I will reimburse you with assistance. Whereas if you suspend taxes, the aid is already there because you don’t pay the tax anymore.)

The Department of Finance's proposal to give cash aid of P6,500 for public utility drivers is good "so long as you can do that immediately and so long as subsidies are sufficient," Quimbo said.

"Based on the current increase that's only good for 13 days and only good for 380,000 drivers. Paano yung 4.5 million na tricycle drivers? Wala pa dyan habal-habal drivers," she said.

(How about the 4.5 million tricycle drivers, not to mention the habal-habal drivers.)

"We’ll just select the products. 'Yung ginagamit ng mahirap i-zero natin yan pero yung ginagamit ng mayaman wag natin i-zero, i-reduce lang natin. There’s relief for all income classes but there’s bigger relief for the poor lower income classes and smaller relief with the richer ones."

(We'll suspend excise tax on products being used by the poor while we'll reduce taxes on products used by the rich.)

Applying the suspension on select products addresses the Department of Budget and Management (DBM)'s concern that the country could lose some P117 billion in revenue, Quimbo said.

"Suspend only taxes of diesel, LPG, kerosene that the lower income classes use more. In the case of gasoline, to not suspend completely the collection but reduce the tax from P10 to P4.35 for P91 and below, and P10 to P7 for P91 and above," she said.

Meantime, putting up an oil price stabilization fund (OPSF) might not be rational, Quimbo said.

"Mas maganda ang deregulated (It's better if it's deregulated). Why? Because it’s really the market forces, the supply and demand that will determine the prices. One is u need to have enough subsidy funds for you to intervene," she said.

"Second, you need to know exactly how much mo ipe-peg ang presyo. 'Di natin alam yun eh, magkakamali at magkakamali. 'Pag underpriced, magkakaroon ng excess demand...Hindi talaga siya rational. Parang anachronistic siya kasi we're towards deregulating market."

(Second, you need to know exactly the price you want it pegged. We don't know that, we'll surely make a mistake. If it's underpriced, there will be excess demand... It's irrational. It's anachronistic because we're towards a deregulating market.)

Government has also increased its VAT (value added tax) collections as a result of the increase in prices, Quimbo added.

The lawmaker also proposed that the Philippine Competition Commission be included in the task force of the Department fo Energy and Department of Justice on fuel price hike.

"Because of absence of competition pwede talagang magkaroon ng excess profits (it is possible to have excess profits)," she said.

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