Senator Imee Marcos has appealed for the suspension of the imposition of the 12-percent value-added tax (VAT) on oil products for a year while the country continues to grapple with the COVID-19 pandemic and its impacts to the economy.
The chairperson of the Senate Committee on Economic Affairs issued the call Tuesday, July 13, as she noted the price increases implemented by some oil companies for gasoline, kerosene and diesel.
"Oil price hikes have a domino effect on agricultural products and other essentials. The higher costs will be passed on to the ordinary consumer who may still not have a job but has no choice but to deal with rising prices of food, electricity, and other goods,” she pointed out.
Suspending the VAT on oil products, she said, will not only provide relief to motorists but also consumers.
Oil companies were expected to impose starting July 13 an increase of ₱1.15 to ₱1.30 per liter for gasoline; ₱0.55 to ₱0.65 for diesel; and ₱0.60 to P0.70 per liter for kerosene.
Department of Energy (DOE) monitoring showed that since January this year, prices per liter have already increased by ₱12.35 for gasoline, ₱10 for diesel, and ₱8.35 for kerosene.
The price increases were attributed to the rising value of US dollar and surging prices in the international market.
Currently, the government is imposing a 12-percent VAT on fuel products, in addition to the excise tax under the Tax Reform for Acceleration and Inclusion (TRAIN) law.
Under the TRAIN law signed by President Duterte in 2017, excise tax is ₱2.50 per liter for diesel, and ₱7 per liter for gasoline.