To ease the financial burden of Filipinos, Senator Imee R. Marcos on Thursday, July 22 filed a bill granting President Duterte the power to lower the rate or suspend the imposition of value added tax (VAT) on petroleum product for one year in times of national emergency or state of calamity such as the current COVID-19 pandemic.
The measure, Senate Bill 2320, seeks to amend sections 106 and 107 of the National Internal Revenue Code, as amended.
The bill of Marcos, chairwoman of the Senate economic affairs committee, was expected to be taken up by the Senate after President Duterte has delivered his last State of the Nation Address (SONA) on Monday, July 26.
Marcos explained that while inflation could not be fully attributed to the increase in oil prices, the Bangko Sentral ng Pilipinas (BSP), through statements made by Governor Benjamin Diokno this year, has consistently identified increases in oil prices as possible upward pressure in inflation.
‘’The higher costs of goods and services that are, in part, due to the uptick of fuel prices, are expectedly passed on to the ordinary consumer who may still be unemployed but has no choice but to deal with the rising prices of everyday essential commodities,’’ Marcos explained.
‘’In view of the current economic and employment situation of the country resulting from the COVID-19 pandemic, there is a need to give some relief to the ordinary Filipino and ensure that they are able to survive and recover during this pandemic,’’ she said.
Marcos pointed out that Filipino people and workers have felt the severe impact of the COVID-19 pandemic.
‘’While the Philippines has been gradually recovering from the effects of the pandemic, as of July 1, 2021, the Department of Labor and Employment (DOLE) reported an unemployment rate of 7.7 percent (3.730 million unemployed),’’ she said.
‘’While we see slight improvement as compared to the unemployment rate of 8.7 percent in the first half of 2021, it is undeniable that a vast number of Filipinos are still unemployed and without a stable source of income. Since the implementation of Republic Act No. 10963, or the “Tax Reform for Acceleration and Inclusion (TRAIN) Law”, fuel prices have steadily risen,’’ she stressed.
Marcos explained that these oil price hikes have had a noticeable domino effect on the prices of basic goods and services, such as agricultural products, transportation, food, electricity and other essentials.
Since January 2021, fuel prices per liter have already increased by P13 for gasoline, P10 for diesel, and P9 for kerosene.
The higher cost of petroleum products has resulted in inflation being above the government target of 2-4 percent for 2021, with inflation at 4.2 percent in January, 4.7 percent in February, 4.5 percent in the months of March, April and May, and 4.1 percent in June.
‘’To ensure fiscal sustainability on the part of the Government, excise taxes imposed on the petroleum products will be retained. In view of the foregoing, the approval of this bill is earnestly sought,’’ Marcos said.