The Bureau of Internal Revenue has promised to finish this month all of the revenue regulations (RR) that will guide the implementation of the various measures under the Tax Reform for Acceleration and Inclusion Act (TRAIN).
Also, the BIR and the departments of trade and industry and of energy warned that firms caught taking advantage of the TRAIN by raising prices of old stocks would be slapped with profiteering charges.
Internal Revenue Commissioner Caesar R. Dulay said Wednesday that the BIR was working on the draft RRs, which would be presented for public consultations on Jan. 11-12.
The BIR last week released the new withholding tax rates to guide employers in computing the income taxes of their workers.
Dulay said next in line were guidelines on new or additional excise taxes, which would be retroactively applied as the TRAIN went into effect on Jan. 1.
BIR Assistant Commissioner Marissa O. Cabreros said they wanted all RRs, which must also be approved by Finance Secretary Carlos Dominguez III before these are implemented, to be out in January.
The BIR will issue RRs concerning income tax, withholding tax, value-added tax (VAT), excise tax on petroleum, excise tax on automobiles, excise tax on mineral products, excise tax on tobacco, excise tax on sweetened beverage, cosmetic procedures, estate and donor’s tax, percentage tax, and documentary stamp tax, the country’s biggest revenue agency said.
Also on Wednesday, energy officials said additional excise taxes on petroleum products should be reflected in pump prices no earlier than Jan. 16 considering that each oil firm was required to maintain a stock good for at least 15 days.
“We expect that any price increase due to the TRAIN program to be done 15 days after Jan. 1, at the earliest,” Energy Assistant Secretary Leonido Pulido III said.
Pulido added that since different firms had different volumes of stock, it was also expected that oil companies would have different dates for the implementation of the new excise taxes.
Under the previous tax regime, only gasoline and aviation gas carry excise taxes at P4.35 and P3.67 a liter, respectively.
Combined with the 12-percent VAT, gasoline is levied a total P4.87 and aviation gas, P4.11 a liter.
Under the first year of the TRAIN program, taxes on gasoline will rise by P2.97 a liter including VAT. Similarly, aviation gas will bear an additional 37 centavos a liter in taxes. Also, diesel will now be taxed P2.80 a liter including VAT while kerosene will be levied P3.36 a liter. LPG for cooking will now be taxed P1.12 a kilo while LPG for vehicles will now be taxed at P2.80 a kilo. Finally, fuel oil—used for industrial purposes including electricity generation—will be taxed P2.80 a liter.
Asked how consumers—especially motorists—may know when pump prices should change due to the excise tax, Energy Undersecretary Felix William Fuentebella said the Department of Energy had asked oil firms to submit notarized inventory reports.
“The oil companies agreed to share data so that we may know when the new taxes should take effect,” Fuentebella said. “We also asked them to tell retailers to post notices in stations on when their products will bear the new taxes.”
In a statement, Energy Secretary Alfonso G. Cusi assured the public that the DOE was keeping a close watch over oil firms to prevent profiteering over the implementation of the TRAIN.
In the case of soft drinks, BIR Deputy Commissioner Arnel Guballa said they would check inventories to see if old stocks were priced higher even as old tax rates apply.
Starting Jan. 1, sugary drinks are also slapped an excise tax besides the VAT as well as income tax paid by the manufacturers and retailers.
Guballa noted that buffer stocks usually last one to three months for various commodities, including sugary drinks.
For its part, the DTI is considering to stop companies from raising the prices of sugar-sweetened beverages (SSBs) at least until the third week of January.
With new excise taxes in effect since Jan. 1, Trade Secretary Ramon Lopez clarified that the new rates should be applied only on new stocks of SSBs, noting that old stocks still qualified under the previous tax rules.
As of press time, he said they were still asking beverage companies the number of days their current inventory would last in the hands of distributors and retailers. Citing his experience, the former official of RFM Corp. said the stocks would last two weeks.
“So that it would be simple, we can mandate SSB prices at retail not to change until Jan. 15,” he added.
The government passed Republic Act No. 10963 in December last year, a comprehensive tax reform package that now lowers the personal income tax of many Filipinos while raising consumption taxes on goods such as SSBs.
Also known as the TRAIN, the law includes an imposition of P6 a liter tax on beverages using caloric and noncaloric sweeteners and P12 a liter on beverages using high fructose corn syrup.
Likewise, the excise tax on fuel would not be slapped on old stocks, Lopez said. The increase in fuel prices on Jan. 1, however, was not due to the TRAIN, but due to “the usual ups and downs” of world oil prices, he added.
He said that there would also be a “minimal impact” on inflation, an impact so small that it should not alter the suggested retail prices (SRPs) of basic goods and commodities. He said the impact should even be “absorbed by companies.”
“We will watch for hoarders and profiteers. We will monitor closely price changes and we will also ensure prices below SRPs,” he said.