High oil prices to boost tax collection by P14B
Higher global oil prices will raise the government’s collections from value-added tax (VAT) slapped on the commodity by P14 billion, narrowing the foregone revenues from the looming suspension of excise taxes, the Department of Finance (DOF) said Thursday.
DOF Undersecretary and chief economist Gil Beltran said the net revenue loss would be only P27 billion, taking into account the P41 billion in forgone revenues from suspending the implementation of the fuel excise tax next year.
“If the Dubai crude oil price is higher than $80 a barrel, then there will be additional gains” from the 12-percent VAT take, Beltran said.
The Duterte administration’s economic managers and a number of senators earlier recommended to the President the temporary suspension of the P2-a-liter oil excise tax rate hike scheduled on Jan. 1 next year.
Under the Tax Reform for Acceleration and Inclusion (TRAIN) Act, an excise tax of P2.50 a liter was imposed on diesel and bunker fuel starting this year. This would go up to P4.50 in 2019 and P6 in 2020.
The excise tax on gasoline increased from P4.35 a liter to P7 this year and then to P9 in 2019, and P10 in 2020.
The TRAIN Act also tasked the DOF to review yearly the implementation of the higher excise taxes on fuel products.
Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.