House energy panel supportive of DOE proposal to suspend excise tax on fuel

Published October 28, 2021, 7:30 PM

by Ben Rosario

The Department of Energy proposal for the passage of a bill that would grant the agency authority to suspend the collection of excise tax on petroleum products has won the support of key members of the House Committee on Energy.

Oil price hike holdup

Chaired by Pampanga Rep. Juan Miguel Arroyo, the House panel will pursue the proposal with its members stressing the urgency of its passage.

In a briefing conducted Thursday, Oct. 28 for the House committee by the DOE and the Department of Finance, the two departments presented opposing stands on the issue.

Energy Secretary Alfonso Cusi said passage of their legislative proposal is urgent as Filipinos continue to suffer the economic effects of both restrictive fuel cost and the COVID-19 pandemic.

“Thank you for giving importance to our letter. This is not for the DOE, ito po ay lubhang kailangan na ng mga mamamayan. (this is badly needed by the people),” said Cusi, referring to a letter urging the committee to seriously consider the DOE proposal.

The DOF, represented by Director Nina Asuncion, warned that suspending excise and value added taxes on fuel will cost government P147.1 billion in foregone revenues.

“The unrealized public spending and investments from the foregone revenues will be detrimental to our economic recovery and long term growth,” said Asuncion.

Deputy Minority Leader and Bayan Muna Rep. Carlos Isagani Zarate slammed the DOF stand as he pointed out that suspension of excise tax had been pushed by government as a provision of the much-criticized Republic ACt 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) Law The TRAIN Law provides that excise tax on fuel may be suspended in the first three years of its implementation if oil prices in the world market reach $80 per barrel.

“Kung noon pinapayagan, hindi ko maintindihan kung bakit hindi pinapayagan ngayon. (If it was allowed before , I cannot understand why it cannot be permitted now),” Zarate said.

Zarate lamented that fuel cost have soared since January as oil companies announced a total 33 price hikes this year.

Reps. Ria Vergara (3rd District, Nueva Ecija) and Godofredo Guya (RECOBODA) agreed with the DOE’s contention that suspending the collection of excise tax on fuel is urgently needed to help Filipinos recover from the effects of the pandemic.

The DOE proposal is to amend the TRAIN Law to allow the DOE to suspend the collection of excise tax when fuel price hikes have become a serious burden to Filipinos.

Director Rino Abad of the DOE Oil Industry Management Bureau explained that the TRAIN Law no longer provides for suspension of excise tax collection. He said the DOE believes that this should be restored.