Lawmakers call for strict monitoring of TRAIN’s impact on prices of fuel

In File Photo: A gasoline boy fills up the tank of a customer at a Petron gas station along Osmeña Highway in Manila.

The House of Representatives is calling for the creation of an interagency body that would monitor the movement of oil prices to make sure consumers will not be taken advantage of once the impact of TRAIN—or the Tax Reform for Acceleration and Inclusion Act—is felt.

Also, leaders of the lower chamber warned oil companies that Package 1-A of TRAIN, or Republic Act 10963, should not have caused price spikes this early even if it took effect on January 1.

Deputy Speaker Romero S. Quimbo of  the Second District of Marikina said oil companies can be held liable for economic sabotage if proven guilty of profiteering.

“I call on the ERC [Energy Regulatory Commission] to make sure that this kind of front-loading is not abused,” said Quimbo, a former chairman of the House Committee on Ways and Means.

“While selling of gasoline bought earlier at a cheaper price is not per se illegal, if it is proven that such was done with malice and with pure profiteering intent, the company can be held liable for economic sabotage,” the lawmaker added.

Earlier, the Department of Finance said the increase in the prices of fuel is not expected to take effect on January 1, as it takes a few days for the 2017 oil stock to be used up, noting that “oil-price increase done by companies on January 1 might be considered profiteering.”

House Committee on Appropriations Vice Chairman Luis Raymund F. Villafuerte of the Second District of Camarines Sur also said that oil companies could not automatically raise their prices until their old oil stocks have been used up. “The excise tax is paid at the point of importation or refinery, thus, the traders couldn’t jack up prices last January 1 on their old stocks—to the detriment of Filipino consumers—using the new excise rates as an excuse,” Villafuerte said.

He called on the government to create an interagency committee to monitor oil-price movements. “The government should put up right away an interagency committee to monitor price movements by oil companies and petroleum dealers—and prevent them from engaging in profiteering—following last January 1’s effectivity of the new excise-tax rates under the TRAIN law.”

“This proposed interagency body must be empowered to audit these private firms to make sure they do not shrewdly use the TRAIN as a ruse to jack up prices,” he added.

Villafuerte said the monitoring and audit work of the proposed interagency group would serve as a dry run for the nationwide monitoring activity that the Bureau of Internal Revenue and Bureau of Customs would be doing once the TRAIN-mandated fuel marking and monitoring system is in place.

Moreover, House Committee on Banks and Financial Intermediaries Chairman Ben P. Evardone of the Lone District of  Eastern Samar urged the government to activate its task force to monitor price increases.

“The government should activate its task force composed of the department of Energy Justice and Philippine National Police to strictly monitor oil companies from possible violation of the existing laws,” he said. “The task force can conduct on the spot audits of oil companies to prevent them from charging excise tax to old stocks.”

Question 

Meanwhile, Rep. Carlos Isagani T. Zarate of Bayan Muna on Tuesday said the Makabayan bloc is now carefully studying to question before the Supreme Court the implementation of the new tax law.

“We will challenge the legality of this runaway TRAIN, as it was railroaded in the House without the required quorum and distribution of [bicameral conference committee report] approved copies to the members,” Zarate said.

The lower chamber ratified the congressional bicameral conference committee report last December 13. “The majority of our poor people  will suffer more and would be mired further into poverty with the expected spike in the prices of major basic commodities and services beginning this month,” he said.

“This ‘price shock’ would definitely hit the poor the hardest considering that they do not have higher take-home pay due to TRAIN but have to shell out more money due to it, he added.

According to Zarate, the TRAIN would kick oil prices up by P2.97 a liter for gasoline, P2.80 a liter for diesel and P3.36 a liter for kerosene.

“These would have a severe domino effect on the prices of other products and services which is further aggravated by the VAT increases on these said products themselves. The effect of this ‘price shock’ can be crippling to the 15.2 million poor families and even to the whole economy,” the lawmaker said. The government has started implementing the TRAIN on January 1.

For oil and petroleum, the law imposed a tax of P3 for kerosene, P2.50 for diesel, P1 for liquified petroleum gas, while all petroleum products used as input, feedstock, raw materials for petrochem and refining or as replacement fuel are exempted.

It, meanwhile, provides that workers earning P250,000 will be exempted from paying personal- income tax. The law also imposed excise tax on coal: P50 per metric ton for the first year, P100 for the second and P150 for the third.

The TRAIN said the tax rate to be imposed on sugar-sweetened beverages are P6 tax per liter for juices and energy drinks and P12 tax per liter for beverages with high-fructose corn syrup.

It said the excise-tax rates for all nonmetallic minerals and quarry resources and all metallic minerals, including copper, gold and chromite, will be doubled.

For automotive, it imposed an excise tax of 4 percent for vehicles priced up to P600,000; 10 percent for over P600,000 to P1 million; 20 percent for over P1 million  up to P4 million; and 50 percent for over P4 million. The law also eased the rates of estate and donor’s taxes by imposing a unitary tax rate of 6 percent.

 

 

 

Image Credits: Alysa Salen

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Jovee Marie de la Cruz

Jovee Marie Dela Cruz is working as a reporter in the country's leading business newspaper the BusinessMirror since 2013.
Ms. Dela Cruz, who is in the media industry for 8 years, is currently covering the House of Representatives.
She graduated from Universidad De Manila with a degree of Bachelor of Arts in Political Science in 2008.
At present, Ms. Dela Cruz is finishing up her master's degree in communication at the Polytechnic University of the Philippines (PUP).
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