House wants excise tax on fuel suspended

Published by rudy Date posted on April 26, 2011

Amid the unabated rise in the process of oil and other petroleum products, legislators yesterday urged Malacañang to look into the possibility of reducing the P4.35 per liter excise tax on gasoline as a way of cushioning the effects of the soaring gasoline prices used by tricycles, taxi cabs, farm equipment and fishing boats.

Aurora Rep. Juan Edgardo Angara said Malacañang should stop stonewalling on calls to reduce the 12-percent value added tax (VAT) on motor vehicles and consider the option of cutting on the excise tax on gasoline.

“If the anxiety over any VAT reduction is due to the administrative problems in implementing two VAT rates in one system, then that fear is absent in the fixed excised tax on gasoline,” Angara said yesterday.

Citing records at the Bureau of Customs, Angara maintained that contrary to the popular perception that VAT is the “biggest tax additive” on fuel, gasoline users had actually paid more excise tax than VAT.

He said that excise tax paid by importers on 1.296 billion liters of premium gasoline amounted to P5.507 billion while VAT payments for the same volume reached P4.331 billion.

“Excise tax paid on 297 million liters of regular gasoline, on the other hand, totaled P1.144 billion, higher than tha P931 million in VAT that the said imports fetched,” Angara said.

He said that while oil companies pay upfront the excise tax on gasoline imports, the levy is passed on to consumers.

“VAT is what we see because it is there in the receipt every time we buy gasoline but it has a bigger but hidden cousin called the excise tax,” he said.

Angara said that reducing excise tax would be easier to implement because excise tax is specific unlike VAT which is based on value.

“It (excise tax) is not subject to the vagaries of the world market. If and when reduced, government can meet the demands for lower gas prices without destroying an important revenue source that funds school programs,” Angara added.

The Aurora lawmaker said that the exemption of kerosene, liquefied petroleum gas and diesel from excise tax does not cushion the impact of rising gas prices anymore because aside from jeepneys and buses, most SUVs and premium cars nowadays are also running on diesel.

“We have here a situation wherein a diesel engine BMW X5 does not pay excise tax while a tricycle does, wherein a diesel-fed Lexus uses fuel which is excise tax exempt, while a farmer pays and additional P4.35 per liter on the gasoline for his hand tractor. And the disparity does not end there. A billionaire pays an excise tax of P3.65 for every liter of aviation gas for his private jet, while a marginal fisherman coughs up an excise tax of P4.35 per liter for gasoline for his banca,” Angara said.

In a related development, Bayan Muna Rep. Neri Colmenares called on the Aquino government to scrutinize the books of oil firms to determine if the price adjustments in the past were just and warranted. –Gerry Baldo, Daily Tribune

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