Duterte to suspend excise tax on oil for 2019

October 14, 2018

President Rodrigo Duterte will soon order the temporary suspension of the next tranche of the fuel tax rate increase under the Tax Reform for Acceleration and Inclusion (TRAIN) Law, Finance Secretary Carlos Dominguez said yesterday.

Dominguez made the announcement after an online article quoted Special Assistant to the President Bong Go as saying that Duterte had signed an order on the suspension. Go, however, retracted his statement and said he was referring to the President’s certification of the rice tariffication bill as urgent. The article had also been taken down.

“President is making an early announcement of the temporary suspension of the January 2019 oil excise increase under the TRAIN Law,” Dominguez said. “This announcement is being made two months before the time required by law, to proactively anchor inflation expectations and enhance the welfare of the Filipino people.”

Dominguez said Duterte made the decision after consulting the Congress and his economic advisers in a bid to address inflation, which reached a nine-year high of 6.7. percent in September.

“After consulting the leadership of both the Senate and the House of Representatives, as well as the economic team, the President is confident that this course of action will help anchor inflation expectations for the coming year, allow the public to manage their finances better, and disallow hoarders and profiteers from taking advantage of the situation,” he said.

The rising costs of oil in the global market are seen as among the culprits behind the continuous increase in the prices of widely-used goods.

“Today’s price and multiple estimates of crude prices over the next two months show that the average price will stay above the $80 threshold, and it is therefore being announced early that the suspension mechanism will be activated,” he said.

The TRAIN Law, which took effect in January, directs an increase in the excise tax imposed on oil products from 2018 to 2020. For 2019, the excise tax on fuel products will go up by another P2 per liter starting January. The increase, however, can be suspended if the three-month average price of Dubai crude reaches at least $80 per barrel.

Meanwhile, 17 senators from different parties have appealed to President Duterte to suspend the excise tax on petroleum products for 2019 and also the supposed third round of increase in 2020.

The senators led by Senate President Vicente “Tito” Sotto III sent a letter to the President dated October 9, 2018 formally requesting for the suspension of the excise tax that is mandated by Republic Act No. 10963 or popularly known as the Tax Reform for Acceleration and Inclusion (TRAIN) Law.

“We, the undersigned senators who are supportive of your reform efforts, respectfully solicit your support in a move for both Houses of Congress to suspend any further increases in excise tax on diesel, gasoline and other petroleum products for 2019 and 2020,” the first paragraph of the letter read.

With Marlon Purificacion