Inflation to remain high even with fuel excise taxes suspended – finance exec
Even if the excise taxes on oil products were to be suspended, inflation could remain high, Finance Assistant Secretary Tony Lambino official said on Wednesday, a day after President Rodrigo Duterte said he was considering the move to help curb price increases.
“I think we also need to manage the expectations in that sense that if Congress decides to create a new suspension mechanism, the prices of oil would not go down that much because the import price has risen from about $40 per barrel to above $80 per barrel,” Lambino said at a press briefing in Malacañang. “The import price is something, unfortunately, we do not control because we are not an oil producer. We are a price-taker.”
According to him, excise taxes on oil products constitute only 25 percent of the increase in oil prices.
On Tuesday, Duterte told reporters his administration was considering suspending the excise taxes on oil products amid the record-high 6.7-percent inflation in the country.
Sought for comment on this, Lambino said the Department of Finance would seek guidance on the latest pronouncement of the President.
“As far as I could tell, I interpreted the statement as being the next increase – which is P2, the 2019 increase in the excise. And actually, there already is suspension mechanism in place in the TRAIN [Tax Reform for Acceleration and Inclusion] law for that to happen,” he said.
He said there might be no immediate relief for the public affected by inflation as the suspension could only happen in January 2019.
A provision in the TRAIN law states the suspension of further rate increases on excise taxes on oil in case an average of above $80 a barrel occurs for three straight months.
Lawmakers earlier urged the President to suspend the excise taxes on fuel products to tame inflation.
“We are looking at all advice received regarding this area. We also need to look at all of the factors, the main factors involved in such a decision. So we looked to, of course, the Cabinet, our principals and, of course, the Office of the President for final guidance on this,” Lambino said. /atm
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