DOF studying carbon tax as IMF urges Asean shift to ‘green’ economy
MANILA, Philippines — The Department of Finance (DOF) is looking into imposing a carbon tax or levy on the carbon content of fossil fuels as the International Monetary Fund (IMF) urged Asean economies to shift from “brown” to “green” to decelerate climate change.
Undersecretary Karl Kendrick T. Chua told the Inquirer on Wednesday that DOF was currently studying carbon tax.
“There is a proposal from [Camarines Sur] Rep. [Luis Raymond] Villafuerte – he filed a bill,” Chua noted.
In 2016, DOF included carbon tax among possible new revenue-generating measures – which may be passed by Congress “as needed” – besides casino and lottery tax, “fatty food” tax, and luxury tax on cars, jewelry, and yachts.
Based on DOF’s estimates three years ago, a carbon tax could generate P20 billion in additional revenues for the government.
In a speech during the Asean Leaders’ Summit this week, IMF managing director Kristalina Georgieva urged countries in the region to introduce the carbon tax.
“We have an urgent and collective need to make rapid progress on climate change. We can avoid a bleak future for our children and grandchildren by reducing emissions, offsetting what cannot be reduced, adapting to new climate realities, and building resilience to climate change. Action to move from a brown to a green economy would actually be a big boost for growth in Asean. And those who move first would have a competitive advantage. This is not to be ignored,” Georgieva said.
“To accelerate this transition – I know this is controversial – we need a price on carbon. IMF research tells us that the most efficient way to do it is by introducing a carbon tax. Again, I know this is not a concept with which everyone agrees, but I owe you to tell what our research indicates that this is the best way to travel. The key is to retool the tax system not just adding a new tax. And the revenues would also allow to compensate vulnerable people and those most affected,” Georgieva added.
Meanwhile, Georgieva lauded the Philippines and India’s new national identification (ID) systems, which she said “can help target more precisely those who need assistance most.”
DOF had said the Philippine Identification System (PhilSys) will better identify and track recipients of both the conditional cash transfers under the Pantawid Pamilyang Pilipino Program (4Ps) and the unconditional cash grants given away to poor households affected by higher excise taxes slapped on consumption under the Tax Reform for Acceleration and Inclusion (TRAIN) Act. /kga
