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Malacañang: Fuel excise tax to suspend if crude oil hits $80

Philippine government will suspend the collection of excise taxes on petroleum products should the international crude oil prices hit $80 a barrel to alleviate its impact on consumers.

Zed Tee

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Malacañang: Fuel excise tax to suspend if oil hits $80 per barrel

MANILA, Philippines — As the fuel prices skyrocket, President Rodrigo Duterte’s administration expressed openness on Tuesday, May 22, to the suspension of hefty excise taxes on diesel, liquefied petroleum gas (LPG), kerosene and bunker fuel that widely is used to produce and supply electricity.

The government is all set to suspend the collection of excise taxes on petroleum products should the international crude oil prices hit $80 a barrel to alleviate its impact on consumers, according to presidential spokesperson said on Tuesday, May 22.

The announcement comes after big three oil companies, Chevron, Shell and Petron, and as well as other refined petroleum firms on Tuesday implemented their biggest price hike for gasoline products so far this year of 1.6 pesos per liter or around $0.03, and prices of diesel and kerosene products up by about 1 peso per liter, with what they asserted was to reflect “movements in the international oil market.”

“Excise taxes will be suspended when prices, If I am not mistaken, reach $80 per barrel. We are ready when to suspend the collection when oil prices reach that level,” presidential spokesperson Harry L. Roque said during a press briefing at the Malacañang Palace.

“The collection will be suspended,” Roque added, as part of emergencies to protect the Filipino consumers from a possible oil-price hike shock.

The new tax duties on fuel – and other items such as cars, tobacco and sugary drinks – are part of the Tax Reform for Acceleration and Inclusion (TRAIN) law which took effect at the start of the year.

The TRAIN law is the first package of the comprehensive tax reform program (CTRP) envisioned by President Rodrigo Duterte’s administration, which attempts to correct a number of deficiencies in the tax system to make it simpler, fairer, and more efficient.

The first portion of the government’s tax restructuring has been condemned for the climb in consumer products prices, which skyrocketed to 4.5 percent in April and broke this year’s target of between 2 percent and 4 percent.

Department of Finance Secretary Carlos Dominguez said the roughly two-thirds of the inflation rate in April 2018 was due to the demands of a rapidly-expanding economy, with the TRAIN law accounting for just 0.4 point of the growth instead of the estimated 0.7 point.

“We will coordinate with the Department of Finance and the Department of Budget and Management if the benefits [for poor families] aside from the P200 monthly subsidy [as part of the amelioration program] have been released,” Roque further said in the press briefing. “There are still other benefits to be given to soften the effects of TRAIN.”

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