Lawmaker suggests higher sin taxes instead of higher oil levies

A lawmaker at the House of Representatives urged the country's economic managers to further increase the value-added tax (VAT) rate on sin products to shore up revenues instead of slapping higher excise duty on fuel products.

In a statement on Thursday, PBA Partylist Rep. Jericho Nograles said the looming hike in oil excise levies could run counter to President Rodrigo Duterte's social reform agenda with the country's poor bearing the brunt of these new taxes.

Nograles further explained that imposing higher excise tax on diesel would greatly diminish the purchasing power of Filipino consumers as it translates to higher transport costs and dramatic increase in prices of goods including basic commodities.

"This can have inflationary effects on our economy. Our jeepneys, buses, farm implements, cargo trucks and haulers and even some of our power plants are run by diesel," Nograles said.

"Imposing a higher excise tax on diesel will mean increased cost in operating these vehicles and facilities. Obviously, all added costs will be passed on to our consumers," he added.

Slapping additional fuel taxes is among the offsetting measures to compensate foregone revenues arising from the planned lowering of income tax rates as proposed by the Department of Finance in its comprehensive tax reform bill.

An excise tax of PHP6 per liter will be imposed on diesel, bunker fuel oil, denatured alcohol, kerosene, liquefied petroleum gas, and processed gas, all of which are currently exempted from excise tax.

Meanwhile, the tax on regular, leaded, unleaded, and premium gasoline will be increased from PHP10 per liter from the current PHP4.35 per liter.

Nograles suggested that government economic managers should push for the swift approval of legislative measures designed to raise revenues through higher excise and value-added tax rates on sin products such as alcohol.

He noted that the two-tier tax system on cigarettes, as provided in Republic Act 10351 or the Sin Tax Reform Act of 2012, is set to be unitary starting this month..

"For one, the government should see the full implementation of the Sin Tax Law and possibly amend it further to increase government revenues. Creating a special law to further increase the Value Added Tax on liquor and other sin products is a better option than imposing higher tax on diesel," Nograles said.

"Our economic mangers should continue to remain faithful to the commitments of President Duterte. The president wants a better life for all Filipinos especially the poor and that's the track that we should take," he added.

Source: Philippines News Agency

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