Zarate warns of voter ‘hit-back’ amid second round of fuel excise tax

Published December 30, 2018, 7:50 PM

by Dhel Nazario, Jeffrey G. Damicog, and Rey G. Panaligan

By Ellson Quismorio

Bayan Muna Party-List Rep. Carlos Zarate said Sunday that the populace would “hit back” come Election Day if the Duterte administration pushes through with the second round of additional excise taxes on oil and petroleum products this January.

Rep. Carlos Isagani Zarate (Bayan Muna Party list Facebook page / MANILA BULLETIN)
Rep. Carlos Isagani Zarate (Bayan Muna Party list Facebook page / MANILA BULLETIN)

“The Duterte administration is again gambling with the prices of goods with their continued implementation of the TRAIN law and it would definitely hit consumers hard with price shocks,” said Zarate, a member of the militant Makabayan Bloc.

“When oil prices in the international market begins to increase due to heightened demand and reduced production then oil prices in the country would again jack up. Let me also remind the administration that this would hit during the election period and voters would also hit back by junking the administration bets,” Zarate claimed.

TRAIN refers to the Tax Reform for Acceleration and Inclusion (TRAIN) Act, which is the first part of the Duterte administration’s tax reform package.

TRAIN, which took effect in January 2018, lowered income tax rates for Filipinos, with the tradeoff coming in the form of excise taxes on commodities such as petroleum products, coal, and sugar-sweetened beverages (SSB). Petroleum, of course, has a ripple effect on the prices of other goods.

The law imposed a P3 per liter excise tax on fuel this year. It will be followed by additional hikes of P2 per liter in 2019 and P1 per liter in 2020.

Next year will mark the midway point of President Rodrigo Duterte’s administration. Come May, the country will hold a midterm election to determine holders of Senate seats and local positions.

Former congressman Neri Colmenares, chairman of Bayan Muna, said the second tranche of fuel excise tax would be a burden to Filipinos.

“Just like how last year’s cuts in personal income taxes were wiped out by higher prices due to increased taxes on oil, sugary drinks and other goods and services, so too might the benefit of the tax cut on maintenance meds be made insignificant by the next round of excise tax hikes on oil and petroleum products,” said Colmenares.

“In this light, we urge the Department of Finance (DOF) to continue with their earlier plan to suspend the second round of oil tax hikes scheduled for 2019,” the former solon added.

“The decision of the DOF to push through with the second tranche of the oil excise tax increase this January will surely jack up prices anew, given the multiplier effect of oil prices on power, transportation and other basic goods and utilities. We felt it last year and we will feel it again next month despite the DOF’s state of denial,” Colmenares reckoned.