LAWMAKERS on Monday reminded the Executive Department, particularly the Department of Finance, to fully implement the safety net provisions of the Tax Reform of Acceleration and Inclusion (TRAIN) law as the oil-price hike for diesel for January 2020 may reach up to P7 per liter.
Deputy Speaker Michael Romero of 1-Pacman and Deputy Minority Leader Carlos Isagani Zarate made separate statements as the government is expected to implement the third tranche of excise tax increases on fuel next year.
“While the Department of Finance continues to implement the TRAIN law provisions on excise tax increases, we in Congress gently remind the executive agencies that the safety net provisions of that law have not yet been maximized,” said Romero.
By January 1, 2020, the TRAIN law will increase tax on diesel by P1.50 per liter, while gasoline, kerosene, liquefied petroleum gas and lubricating oils will go up by P1. Bunker fuel and petroleum coke, meanwhile, will increase by P1.50.
The TRAIN law provides that 30 percent of the annual incremental revenue be allotted to various programs to offset the effects of higher taxes. These programs include unconditional cash transfers (UCT), fuel vouchers and rice subsidies.
Besides fuel, the TRAIN law also increased the excise taxes on tobacco, automobiles, minerals, documentary stamps and sugar-sweetened beverages (SSB).
During the oversight hearing on the implementation of the TRAIN law, Albay Rep. Joey Salceda discovered that there was no allocation in the 2020 budget for sugar farmers who have been affected by the passage of the TRAIN law, which imposes higher taxes for SSB.
TRAIN slapped a P6-per-liter tax on beverages using caloric and non-caloric sweeteners and P12 per liter on those using high-fructose corn syrup (HFCS). Milk and three-in-one coffee mixes are exempted from this tax.
Under the TRAIN law, 15 percent of the revenue from SSB should go directly to farmers.
P7 per liter
Deputy Minority Leader Rep. Carlos Isagani Zarate of Bayan Muna said with the latest oil price hike plus the third tranche of the TRAIN law’s excise tax on oil, as well as the diesel conversion of oil tankers all over the world, the oil price hike for diesel for January 2020 may reach up to P7 per liter.
He said gasoline could be P1.85 per liter more while kerosene would be P1.35 per liter higher. He noted the latest oil price hike that takes effect January 1 and would welcome the new year is as follows: gasoline, P0.85/liter; kerosene, P0.35/liter; and diesel, P0.50/liter.
“Worse, considering the shift to diesel by tankers transporting oil products, an additional P5 to P10 more, based on DOE computations, will be added to diesel prices per liter. This means, we will have a whopping P7 per liter increase in diesel alone,” said Zarate.
Even if the DOE is telling oil companies to first deplete their old stocks before imposing the added excise tax on oil products, Zarate said that “without the unbundling of the prices of oil products we cannot tell for certain if the oil companies are already passing on the new excise taxes.”