by Hannah L. Torregoza
Saying it is already too much, senators yesterday decried government’s plan to impose additional taxes on fuel products on top of the 12 percent value added tax (VAT) and urged the Duterte administration to first study the impact of such strategy.
Senate minority leader Ralph Recto said there is no “fiscal crisis” to justify the fuel tax hike in the first place.
“I am against it. There is no fiscal crisis. The timing is also bad now that oil prices are on its way up. Just improve collection efficiency and stop smuggling,” Recto said in a text message.
“In addition, government collects more taxes when the economy grows faster. Then grow the economy. Spend the budget first,” Recto added, referring to the P3.35-trillion 2017 General Appropriations Act.
Sen. Francis “Chiz” Escudero said the government should first show and prove that they have exhausted all efforts to collect existing taxes before they push through with their proposal.
“And they can actually spend that money especially given our experience last year re: absorptive capacity,” Escudero said in another text message.
Senate majority leader Vicente “Tito” Sotto III also said the government should first consider looking at other sources of revenue before imposing on the public a fuel tax increase.
“Further study in the Senate is necessary. We have economic experts and members with a lot of common sense therefore the issues can be fully discussed,” Sotto said.
Even with the lowering of income and corporate taxes in the offing, Escudero said the increase in taxes “will far outweigh the net effect of lowering of income tax rates.”
Sen. Leila de Lima slammed the proposal. “This is not acceptable! Dagdag pahirap ito sa publiko, siguradong magtataas ang pamasahe at bilihin habang ang kakayahang bumili ng tao ay hindi naman tumataas (This is an added burden to the public and surely this would cause a hike on transportation fees and basic necessities beyond the reach of consumers),” de Lima said.
“Are they really mad at the poor? It’s always the poor who end up victims – in the war on drugs and in tax collection, the poor is on the losing end,” she lamented.
“This should be studied extensively because the consequences will be carried by the poorest segment of our society. They should, likewise, disclose where will this additional revenue be used,” she said.
She also pressed on the government to justify the fuel hike pointing out they already dropped the collection targets for the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) last year.
“Finally, is this necessary? Last year they dropped the collection targets for BIR and BOC and now they want to impose additional taxes to increase revenue? Maybe they should focus more on fulfilling the President’s campaign promise to curb corruption in these revenue collection agencies to increase collection efficiency,” she pointed out.
At the Lower House, Puwersa ng Bayaning Atleta (PBA) Party-list Rep. Jericho Nograles urged the Finance and the Budget departments to increase the Value Added Tax (VAT) of “sin products” instead of hiking excise tax on diesel.
Diesel and other fuel products are basic commodities that have a direct impact on the day-to-day survival of poor consumers and increasing its cost would run counter to President Duterte’s social reform agenda, Nograles noted.
Imposing higher excise tax on diesel, he said would greatly diminish the purchasing power of Filipino consumer because this would mean higher transport cost and dramatic increase in prices of goods including basic commodities.
“This can have inflationary effects on our economy. Our jeepneys, buses, farm implements, cargo trucks and haulers and even some of our power plants are run by diesel.”
While he agrees with the DOF that revenues are badly needed to finance the government’s infrastructure spending and anti-poverty programs, imposing a higher excise tax on diesel is the wrong way to go.
“This is like punching someone to the ground and then help him get on his feet to treat him for a free meal. To me, that doesn’t make a lot of sense,” Nograles said.
TAX HIKE SUPPORTED
But Senators Sherwin Gatchalian, chair of the Senate Committee on Economic Affairs, and Panfilo “Ping” Lacson said they are open to support Malacañang’s plan to impose additional taxes on fuel products as long as the government can ensure any negative impact on consumers would be averted.
Gatchalian noted that the dynamics of oil production has changed in the past 30 days starting with the Organization of Petroleum Exporting Countries (OPEC) cutting oil production by 1.2 million barrels a day.
“The additional fixed excise taxes on oil will lead to inflation and increase in basic goods such as food,” he said.
So with any tax measure, Gatchalian said the government must ensure the public is protected from any sudden surge of prices in basic commodities and services.
“This proposal should be recalibrated again to insulate the poor from inflation and the heavy burden of oil price increase,” he said.
Lacson said that as long as there is a mechanism to cushion the impact on public transport and other freight-related industries: “I am inclined to support the tax package program of the (DOF) (Department of Finance) and the administration.”
“To clarify, public transport and freight services are the ones using diesel fuel. I don’t care about the diesel-fed SUV’s since the affluent sector who are using the same can afford higher diesel prices,” he said. (With a report from Ellson A. Quismorio)