Cargo transport firms are warning that higher fuel taxes under the recently-signed Tax Reform for Acceleration and Inclusion (Train) Act will inflate operational costs and burden consumers.
Philippine Inter-island Shipping Association, Inc. (PISA) executive director Pedro Aguilar said shipping rates would have to be increased given the “substantial” tax increase for fuel oil.
As fuel accounts for about 30 to 50 percent of a ship’s operational costs, Aguilar said that service providers would not be able to absorb the cost, which will have to be passed on to customers.
The Train Act signed by President Rodrigo Duterte last week lowers personal income taxes but at the same time imposes higher levies on fuel and car sales, among others.
With regard to fuel, staggered increases were set with regard to diesel, from zero to P2.50 in 2018, P4.50 in 2019 to P6 per liter in 2020.
Bunker fuel or fuel oil used by ships will see the same increase as diesel while aviation jet fuel will be levied a P3.67 excise tax in 2018, rising to P4 beginning 2019.
For gasoline, the excise tax will increase from P4.35 to P7 in 2018, P9 in 2019 and then P10 per liter in 2020.