DOF rejects call to roll back fuel excise taxes

May 28, 2018

The Department of Finance (DOF) rejected on Monday to roll back the fuel excise taxes to reduce the burden of the public from rising prices of goods.

In a press briefing in Malacanang,  Assistant Finance Secretary and spokesperson Paola Alvarez cited that under the Tax Reform for Acceleration and Inclusion (TRAIN) Law, a suspension measure only takes effect when the average Dubai crude oil price based on Mean of Platts Singapore (MOPS) for three  months preceding the scheduled increase reaches or exceeds $80 per barrel.

There is no abrupt suspension of the fuel excise taxes, she said.

"Because the provision of the law is very specific also, that when the Dubai crude oil hits $80 per barrel at an average, it will be the next tranche in 2019 that we will suspend and it’s also hard for us to suspend midyear, because you have already projected in your appropriations, in your revenues and in your budget, those things that you will fund and your budget allocations are also set in place," Alvarez explained.

She reiterated that government has put in place mitigating measures, such as social grants in the form of the unconditional cash transfer and fuel vouchers.

She noted that the Department of Social Welfare and Development has already released some P4.3 billion for some 1.8 million Pantawid Pamilyang Pilipino Program (4Ps) beneficiaries and for this year, and some P24 billion will be released as cash subsidies to cover the poorest 10 million households.

Some senators have called for the suspension of TRAIN law, raising the excise tax on fuel.

Specifically, Senator Grace Poe, chairperson of the Senate committee on public service, has said she would ask the DOF and other government agencies to study suspending execise taxes on fuel because of the continued rise in the price of petroleum products.

As to the call of some militant groups to junk the TRAIN law, Presidential Spokesperson Harry Roque said only Congress could do it.

But Roque explained what has been happening now is just "temporary."

He said the government is looking for other sources of oil, such as in Russia. Celerina Monte/DMS