The Department of Finance (DoF) said its proposed reforms in excise taxes on fuel and vehicles has gained the support of Clean Air Asia, an international nongovernment organization (NGO) advocating clean air initiatives.
The group noted the measure as an effective way of raising additional revenues, while curbing air pollution, by reducing the “wasteful consumption” of fossil fuels.
In a statement on Tuesday, the DoF said Clean Air Asia also lauded the government’s plan to use part of the higher collections from the would-be adjustments in taxes on petroleum products and automobiles to implement projects that would promote the efficiency and sustainability of the country’s transportation sector.
The proposed excise tax reforms “can contribute towards potentially reducing wasteful consumption of fossil fuels in the transport sector, alleviating rapid motorization by utilizing part of the revenues for projects that improve the efficiency of the transport systems in the country, and internalizing associated environmental and health costs, such as those from air pollution,” the group was quoted as saying.
“We support the utilization of a significant portion of the revenues from the fuel excise tax reforms to fund transport-related projects. We highly encourage the Philippine Government to instate a mechanism that would ensure that the revenues will be used for projects that promote efficiency and sustainability in the transportation sector, such as low emissions public transportation projects,” Clean Air Asia said in a statement of support signed by its executive director Bjarne Pedersen.
The DoF said the organization also noted that vehicles are often key sources of air pollutants that affect human health and account for a fourth of the energy-related greenhouse gas emissions in the Philippines.
“The emissions inventory for the National Capital Region (2012) conducted by the Environment Management Bureau (EMB), for example, estimates that mobile sources account for 90 percent of the aggregated discharged amounts of air pollutants in the region,” Clean Air Asia said.
Clean Air Asia also said that traffic congestion, which leads to wasted fuel and lost time, results in massive economic losses, according to the DoF.
“In 2015, the National Economic Development Authority (NEDA) estimated that the country is losing P3 billion per day due to traffic congestion,” according to the group.
“Again, we welcome the government’s work to reform taxation initiatives and we believe they have the potential to contribute towards improving the welfare of the Filipino people … We look forward to more progressive policies that would further contribute towards sustainable transport, better air quality, and better citizen welfare,” it added.
The proposed excise tax reforms are contained in House Bill 4774, which was introduced by Quirino Rep. Dakila Carlo Cua.
In one of the House Ways and Means Committee hearings, the DoF said various groups supported the proposal to adopt a fuel marking and monitoring system to prevent oil smuggling and complement efforts at improving the collection of fuel excise taxes.
“Fuel marking, which securely and covertly authenticates petroleum products, will help the government in foiling oil smuggling, which, according to industry data, has led to foregone revenues amounting to some $20 billion to $30 billion annually,” the DoF said.