Group pushes suspension of fuel tax anew amid high inflation in June

An activist group pressed for the suspension of taxes on fuel once again, stressing that high inflation rates are only putting the masses vulnerable to more financial woes.

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MANILA, Philippines — An activist group pressed for the suspension of taxes on fuel once again, stressing that high inflation rates are only putting the masses vulnerable to more financial woes.

Bagong Alyansang Makabayan (Bayan) insisted on Tuesday that economic problems affecting the poor can be solved through tax cuts on oil products and not with targeted subsidies — the program that the new administration intends to implement.

Bayan said this after the Philippine Statistics Authority announced that inflation rates for June 2022 were at a three-year high of 6.1 percent, primarily driven by high food prices.  Some experts believe that this was an offshoot of expensive petroleum products.

“Pumalo na ng 6.1% ang inflation ng June 2022. Napakataas na tantos ito at pinakabulnerable ang mga mahihirap. Ang nagtutulak ng mataas na inflation ay ang mataas na presyo ng langis at pagkain,” Bayan secretary general Renato Reyes said in a statement.

(Inflation for June 2022 has reached 6.1 percent.  This has a great effect and makes the poor vulnerable.  What’s pushing inflation rates up are high prices of oil products and food.)

“Marapat na magkaroon na ng suspension ng oil taxes dahil sobrang bigat na ng sitwasyon ng ekonomiya. HINDI sapat ang targeted subsidies. Dapat across the board, lahat ng sektor, ay makinabang sa pagbaba ng presyo ng langis.  Ito ay para bumaba ang production at transportation costs, at para mapababa ang presyo ng iba pang pangunahing bilihin,” he added.

(It is only right to suspend oil taxes because the situation of the economy has become so burdensome.  Targeted subsidies are not enough, there has to be an across the board solution where all sectors benefit from the decrease in oil prices. This would bring down production at transportation costs, and to decrease prices of other primary commodities.)

READ: June inflation likely zoomed past 6% – economists 

Bayan also said that the value added tax (VAT) on oil products should be set aside amid high transportation costs which has driven prices of goods and electricity upwards.

As of now, diesel fuel — which is being used by most public transportation modes — saw its prices drop by around P3 per liter after a rollback on Tuesday.  However, diesel prices still hover above the P80 per liter mark despite the price reduction.

READ: Fuel firms to roll back price of diesel, kerosene 

“Tandaan na napapamahal ang presyo ng pagkain dahil sa laki ng gastos sa transportation. Unahin nang suspendihin ang VAT sa langis dahil lumalaki ito habang tumataas ang presyo ng langis,” he added.

(Remember that what brings food prices up is high cost in transportation. We must first suspend VAT on oil because this [VAT] increases while oil prices increase.)

This is not the first time that Bayan called for the suspension of taxes, particularly VAT and excise taxes including those brought by the Tax Reform for Acceleration and Inclusion (TRAIN) Law.

Last June 21, Bayan said that collecting VAT despite rising fuel products is ‘oppressive’ as no substantial social aid is being given.  During that time, several pump stations were selling diesel fuel at over P90 per liter, and gasoline at around P80 to P90 per liter depending on the variant.

READ: Bayan says VAT collection from oil products amid rising fuel prices ‘oppressive’ 

As early as March, Bayan also asked for the suspension of oil taxes.  Diesel prices were at P65 to P70 per liter when the statement was made.

READ: With new round of oil price hike, Bayan says suspending oil taxes is just, humane 

President Ferdinand “Bongbong” Marcos Jr., during the campaign season for the 2022 national elections, called for the suspension of the excise taxes on fuel to manage rising prices.  However, Marcos eventually said that they will explore other ideas to manage the issue, looking at possibly supporting hard-hit sectors like transportation instead of totally removing taxes.

READ: Marcos: Suspend fuel excise taxes 

Bayan said Marcos should quickly address the issue before it gets out of hand.

“Kailangan ng kagyat na tugon si Marcos, Jr sa mga problemang ito. Sa ngayon ay wala tayong naririnig sa kanya kung ano na ang sagot ng gobyerno sa napakataas na inflation. Late na ang unang Cabinet meeting at tila nauna pa ang mga party sa Malacanang bago ang problema ng taumbayan,” Reyes noted.

(Marcos should provide a quick solution to these problems.  As of now, we have not heard anything from him about the government’s response to the high inflation.  The cabinet meeting has been late and it seems they are prioritizing parties over the people’s problems.)

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