DOF can't block proposed suspension of fuel excise tax–House leader

Published February 23, 2022, 1:49 PM

by Ellson Quismorio

House Deputy Speaker Mikee Romero claimed that the Department of Finance (DOF) can’t block the proposed suspension of oil taxes, which he said would give Filipino consumers much-needed relief by way of fuel price cuts.


Romero, in a statement Wednesday, Feb. 23, reminded the DOF that it had accepted a three-year moratorium on higher excise taxes on oil products under Republic Act (RA) No. 10963, or the Tax Reform Acceleration and Inclusion (TRAIN) Law. The law took effect on Jan. 1, 2018.

“As lawyers would say, the finance department is estopped from blocking the proposed excise tax suspension,” said Romero, who represents 1-Pacman Party-list in the House of Representatives.

As per the House leader’s estimates, the proposed suspension of the fuel tax would lead to pump prices of gasoline and diesel getting slashed by 10 per liter and P6 per liter, respectively. Moreover, liquefied petroleum gas (LPG) or cooking gas prices will also get reduced by P3 per kilo.

Earlier, Romero pitched the reenactment of Section 43 of the TRAIN Law, which provided for the automatic suspension of excise taxes when the price of crude in the world market breaches $80 per barrel.

However, lawmakers behind the TRAIN Law’s passage only allowed such suspension of excise tax for the years 2018, 2019, and 2020. That’s why Romero has asked Malacañang to allow Congress to hold special sessions amid the election campaign break.

Meanwhile, the Deputy Speaker welcomed the reported statement of DOF Secretary Carlos Dominguez that lawmakers should allow the TRAIN law to operate.

“That is what was put in the TRAIN Law, so let’s just wait for the law to operate. It is not only us who are suffering from high prices, it is everywhere,” Dominguez was quoted as telling a news forum on Tuesday, Feb. 22.

Romero said the DOF secretary “was apparently unaware that the provision of the law he referred to, which is Section 43, is no longer in effect”.

“I am happy that the reported statement of Secretary Dominguez implies that he is agreeable to the temporary shelving of oil levies if the price of crude hits $80 per barrel. This means that taxes should now suspended because the cost of crude has soared to more than $90 per barrel, at least $10 beyond the threshold under Section 43,” he said.

Romero stressed that the decision of many countries to reopen their economies despite the pandemic and tensions between Russia and Ukraine and its allies would further put upward pressure on the cost of crude.

Due to skyrocketing crude cost, domestic fuel prices have jumped by more than P20 per barrel since last year, with the price of gasoline reportedly going up to P80 per liter in some areas.

Romero said the easing of restrictions by countries in connection with the coronavirus disease (COVID-19) pandemic and the ongoing tension between Russia and Ukraine have caused crude price to shoot up.