Govt wants higher fuel excise tax

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The Duterte administration would push for higher excise taxes on fuels, noting that it is now the right time for such a move with oil prices remaining low, says the Finance Secretary Carlos Dominguez 3rd.

“Yes, yes. We have to, because that thing . . . was set in 1997 . . . ,” Dominguez told reporters when asked about the possibility of higher excise taxes on gas, diesel and other oil products under the new administration.

At present, petroleum products are taxed at variable rates ranging up to P4.50 a liter or kilogram.

“It is P4.50, something like that, since then . . . and P4.50 then is not worth as P4.50 right now. So we have to adjust it . . . at least to index it,” the Finance chief explained.


“Besides, now is the time to do it, because the price [of oil]is low,” he added.

Indexing oil excise taxes is one of the measures under the proposed Comprehensive Tax Reform Program of the previous Aquino administration for the Duterte administration.

To take advantage of the low oil price environment, the former administration said it is appealing to explore indexing oil excise taxes to inflation, whose rates have not been adjusted since 1997.

The previous administration said the government would raise P132-billion additional revenue if the current excise tax on fuels would be raised.

It said regular gasoline could be taxed at P10 per liter while diesel can be taxed at P6 per liter, while increasing rates by 4 percent every year moving forward. A subsidy would be provided if crude oil price reached more than $90 a barrel.

It further said a P10-per-liter proposed tax rate was derived by indexing the existing excise tax rate of gasoline (P4.35/liter) to cumulative inflation factor of 2.37 (1997-2014). The same formula was used for the proposed tax rate on diesel.

This oil tax reform might also cover coal and other petroleum products to internalize the economic costs of climate change, it added.

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  1. This is an idiotic fiscal strategy formulated by abnoy’s finance sec. Purisima and now ready to be implemented by Dominguez 3rd. BACKGROUNDER: increase the taxable income to nearly one million ph per annum and decrease percentage income tax payable; to balance this, increase vat collections from 12% to 15% meaning for every ph100 you purchase you will add ph15 should vat increase materializes; now if you add ph10 excise tax for fuel naturally prices of all commodities will increase!who will suffer? Yes ur right. The masses will cry and curse the administration. The readon of Dominguez 3rd is that now is the time to increase excise tax due to low prices of oil in international market. This is an unacceptable reason and explanation. The finance department should look and think some other ways of generating government income without punishing the people. Remember this is the idea of previous admin design to make the Du30 admin despise,curse and hated by the masses should this idiotic ideas coming from economic moron of pnoy’s admin be adopted and implemented. ??