Employers group suggests VAT cap, excise tax suspension on fuel


Posted at Sep 12 2018 04:17 PM | Updated as of Sep 12 2018 04:31 PM

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MANILA - The government should consider capping the value added tax on fuel and suspending excise duties as consumer prices to help tame inflation, an employers' group said on Wednesday. 

After inflation hit 6.4 percent in August, the government needs to ease the burden for Filipinos by "capping" its collections from fuel taxes, said the head of the Employers Confederation of the Philippines president Sergio Ortiz-Luis.

With prices of petroleum products rising, VAT collections from fuel also likely rose, possibly to a point when the government's collection target for that specific duty is met.

"Kung kita ay naabot na, ay i-cap naman. Kung pwede naman e di i-suspend muna (If the target collection has been reached, let's put a cap on further collection. If possible let's suspend it temporarily)," Ortiz said in an interview with DZMM Teleradyo. 

He said suspending the excise tax on fuel, which is pegged at P2.50 this year on diesel, and capping VAT collections on fuel, will help keep the cost of transportation down for wage earners. 

Oil companies can also be allowed to import their own ethanol, which is mixed with gasoline, he said. A new law requires firms to buy locally produced ethanol to support the sugar industry.

He estimated that gasoline prices could go down by P2 to P3 if oil firms use imported ethanol.