Lawmakers and motorists alike have brought up the idea of suspending the collection of excise taxes on petrol products in light of the rising fuel prices. Unfortunately, that probably won’t be happening anytime soon.
President Rodrigo Duterte in a cabinet meeting earlier today approved the recommendation of the Department of Finance (DOF) to retain the excise taxes in order to avoid further revenue losses for the government.
DOF secretary Carlos Dominguez III said that suspending excise taxes could reduce the government’s total revenue by P105.9 billion in 2022 and would also just force the administration to “borrow more money.” Dominguez added that this move would only benefit the rich.
“The bottom 50% of the Philippines, they only consume 13% of the fuel,” Dominguez said. “So, cutting the tax will benefit more the people who have cars and the other richer people. We will not be benefitting so much the bottom 50% of our population, that will make it very inequitable.”
Domingues then suggested that providing P200 monthly subsidies to this bottom half of households would be better, as this is what the government can currently afford. He also call his proposal “sustainable.”
Now, even if we won’t be seeing any major tax cuts, the government will still be making changes to mitigate the effects of the rising fuel prices, such as Congress’ recent proposal to amend the Oil Deregulation Law in favor of consumers. Also, at the very least, there’s now optimism that prices could start going back down starting next week.