DOF cites instance when gov’t can suspend excise taxes on fuel

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The government cannot suspend at once the excise taxes on fuel under the newly-implemented tax reform program, the Department of Finance said on Monday, citing certain provisions under the controversial law.

DOF spokesperson Assistant Secretary Paula Alvarez said under the Tax Reform Acceleration and Inclusion (Train) Law, the government could only suspend the tax on fuel if international prices of the Dubai crude reach an average of US$80 per barrel in three consecutive months.

“We actually inserted buffer provisions in the Train law wherein once the average oil, international price reaches around US$80 then we can actually suspend the implementation of the next tranche of increase in the excise prices of oil in the succeeding years,” Alvarez said in a Palace briefing.

If the price would be met, it would only apply in 2019, she added.

Senators last week joined labor organizations in calling for the suspension of the full implementation of the tax reform law amid growing complaints of soaring prices of basic commodities.

Senators Grace Poe, Nancy Binay, and JV Ejercito said Train Law should be suspended because basic goods are affected by price hikes.

Senator Bam Aquino, who had voted against the law, has filed a bill which seeks to roll back the excise tax on fuel when the average inflation rate surpasses the annual inflation target over a three-month period.

READ: More senators join calls to suspend excise tax

The DOF, however, nixed such proposal, saying legislation – through a new law or an amendment – is needed to suspend the controversial tax package.

“Hindi po kasi natin puwedeng gawin na it’s just an executive order, kasi po kapag nasa sa batas, kailangan po para ma-amend natin, mag-pass tayo ulit ng batas,” Alvarez said.

(We cannot just issue an executive order, because when it is already implemented by law, we need to amend it or pass a new law.)

Alvarez said the Train law’s impact on the oil price increase is just 0.4 percentage points to the overall inflation rate—most of it was caused by the increase of oil price in the world market.

Presidential Spokesperson Harry Roque said the ongoing oil crisis in the world market is just temporary and the government is exploring ways to cushion the impact of oil price hikes./ac