Senator Aquilino “Koko” Pimentel III has refiled a bill seeking the suspension of value-added tax (VAT) and excise tax on fuel if the Dubai crude oil benchmark exceeds $80 per barrel amid the continuous rise of local pump prices.
The bill, which is a reconciled version of Senate Bill 2320 and 2445 first filed in the 18th Congress, is among Pimentel’s 10 priority bills filed in the 19th Congress.
Under the filed bill, the trigger for automatically suspending the VAT and excise tax on fuel is the Singaporean Mean of Platts, which sets the benchmark for Asian fuel prices. Furthermore, the bill seeks to amend Sections 106, 107, and 148 of the National Revenue Code of 1997.
In a Philippine Daily Inquirer report, Pimental said that excise tax adds up Php 10 to a liter of gasoline, while Php 6 pesos per liter is added for diesel. Another 12% is added on top of fuel prices for VAT.
The senator said that the suspension of VAT and excise tax on fuel would help “alleviate the almost midnight gargantuan increase in prices” which is causing inflation as the country recovers from the COVID-19 pandemic.
The bill, however, does not include a provision that allows the President, through an executive order (EO), to cut down rates or suspend VAT on oil products during national emergencies or states of calamity for one year.
Presidential sister Sen. Imee Marcos filed a similar bill that would grant the president the authority to impose the suspension.
Earlier in June, former Bangko Sentral ng Pilipinas Governor and now Finance Secretary Benjamin Diokno said that the Marcos Administration is unlikely to suspend excise taxes on fuel products.
Photo from Sen. Pimentel’s Facebook Page