Senators oppose higher fuel tax


MEMBERS of the Senate minority bloc are opposed to the planned imposition of additional tax on fuel products and expansion of the value-added tax (VAT) base.

“I am against it (new taxes). There is no fiscal crisis. The timing is also bad now that oil prices are on its way up,” Senate Minority Leader Ralph Recto said.

Recto said there are other ways by which government can generate more revenues, such as improving tax collection and stopping smuggling.

The executive department is considering lowering personal income taxes from 32 percent to 25 percent over a two-year period based on its comprehensive tax reform program (CTRP).

But to compensate the expected revenue loses, the Department of Finance has proposed revenue measures that involves restructuring excise taxes on fuel products and automobiles as well as adjustments on VAT.

Budget Secretary Benjamin Diokno earlier said that the government is eyeing the imposition of P4 per liter excise tax on diesel that would generate an additional P60 billion a year in revenues.

But Recto said there is no reason for a tax increase.

“Government collects more taxes when the economy grows faster. Then grow the economy. Spend the budget first,” he pointed out.

Minority Senator Francis Escudero said that the planned additional tax on fuel products seems to be too much. He said economic managers should exhaust all efforts before proceeding with the planned tax reform.

“The increase in taxes will far outweigh the net effect of lowering of income tax rates,” Escudero said, adding that he would study the tax proposal thoroughly.

Senate majority leader Vicente Sotto 3rd also had some reservations about the planned tax hike and said the proposal should be studied further.

Like Recto, Sotto said government should look for other sources of revenues before imposing on the public.

As for the planned rationalization of tax incentives, Senate ways and means committee chairman Juan Edgardo Angara said that he will wait until the end of the first quarter of 2017 to find out the true state of the tax incentives given to companies.

Senator Leila de Lima said the planned imposition of excise tax on fuel is unacceptable and would burden the public more since it can result in fare hikes and more expensive goods.

“First, (there’s) the government war on drugs that only targets the poor drug suspects and now this tax reform package,” De Lima noted.

Instead of raising taxes, the government should focus on fulfilling the campaign promise of President Rodrigo Duterte to curb corruption in revenue collection agencies to increase collection efficiency, she said.


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