House panel approves oil excise tax reduction

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MANILA – The House Ways and Means Committee passed a substitute bill on Thursday that would reduce or remove excise taxes on petroleum products.

The panel, chaired by Albay Representative Joey Salceda, approved the bill, which will remove excise taxes on diesel, kerosene, and liquefied petroleum gas.

It recommends lowering excise taxes on low-octane gasoline, which is mostly used by tricycle drivers, while maintaining rates on premium gasoline.

The excise tax on fuel products will be suspended for six months.

“It’s immediate relief for Filipino families, especially affected sectors. The bill will cost the government around PHP45 billion, but what the government loses, the consumer gains,” Salceda said.

Salceda added the bill has a self-correcting mechanism, stressing that if prices normalize, it will revert to the Tax Reform for Acceleration and Inclusion (TRAIN) law rates.

“If it goes back to 65 dollars per barrel of crude oil, then the excise tax rates will also normalize,” he said. “The premise of this tax relief bill is that the situation is not normal. If inflation weren’t so high, we would be discussing other matters. But now, consumers are hurting. Inflation is high. Incomes are depressed. So, immediate relief is obviously necessary.”

He anticipates that the House will transmit the bill to the Senate by the third or fourth week of November, as this is a top priority for Speaker Velasco.

In addition, the bill establishes a special fund dedicated solely to ayuda (cash assistance) for affected sectors whenever oil prices go up.

When global crude oil prices drop below USD45 per barrel, the Social Impact Stabilization Fund will be funded by a charge of PHP2 per liter of diesel and gasoline.

“The government manifested in our hearings that the problem with asking for a subsidy that is larger than their PHP1 billion fund for PUVs (public utility vehicles) is the lack of sources. This one answers it for future oil price problems,” he said.

House committees to hold hearings during break

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Spread the loveMANILA – The House of Representatives has authorized for its committees to conduct hearings during the five-week congressional break, extending until late April.