Senate studies changes in TRAIN Law 

The Senate indicated that proposed amendments to the Tax Reform for Acceleration and Inclusion (TRAIN) Act may still be pushed to trim taxes levied on fuel commodities, but may not be outright suspension of excise taxes on petroleum products as this would result in annual revenue losses of roughly P300 billion, according to a report by Manila Bulletin.

According to incoming Senate Committee on Ways and Means Chairman Sherwin T. Gatchalian, the tenor of the legislative measure being propounded now is not a complete scrapping of the excise taxes, but it could just be modification – including the threshold for international prices at which the excise taxes shall be suspended within a prescribed timeframe.

“The cost of removing excise tax on fuel will cost the country about P300 billion a year. But I’m not completely closing that option because we can have a variation of that proposal. Not completely removing excise tax, maybe reducing it by a few notches depending on the oil price,” he said.

One of the proposals sounded off was by Senator Grace Poe, chair of the Senate Public Services Committee which has jurisdiction over the public transport sector, is to re-file proposed amendatory legislation prescribing that oil excise taxes shall be suspended for three months once they exceed $80 per barrel.

The suspension of excise taxes for petroleum products had been a protracted debate between the Executive and Legislative branches of government since last year. The Department of Finance, in particular, had extremely opposed any proposals to toss out fuel excise taxes even just for a short period of time.

Based on his calculation, Gatchalian said that if excise taxes will be suspended for six months, the foregone State revenues will reach P76.48 billion for both gasoline and diesel products.

And if the pass-on of value added tax (VAT) will be temporarily halted, the half-year revenue losses to the government will amount to P76.94 billion.

Meanwhile, President-elect Ferdinand Marcos Jr. highlighted that the leaning of the government is to veer away from total suspension of excise taxes for fuel products, and instead extend targeted subsidies to critical sectors, primarily the public utility vehicles.

Gatchalian, nevertheless, noted that while the PUVs as well as the marginal segment of the agriculture sector are granted financial assistance, a fraction of the population being left out are the middle class, including the workers as well as the small businesses.

“Definitely we have to balance it, because one of the sectors that we’re not hitting right now are the middle class. Yes, we’re helping the riding public. Yes, we’re helping the public utility vehicles, but the middle class is taking the hit because they have their own vehicles,” the solon pointed out.

He added that for those with their own small businesses, ”that’s where the excise tax suspension will probably alleviate the pain of our middle class. But that’s the last option…I’m not putting that as the priority, because we need revenue, especially at this time that we’re recovering from the pandemic and fiscal space is very low.”

Tags:

Real estate is no longer just Location, Location, Location. 
Now, it’s about Location, Information…and Timing! 

- Alejandro Manalac, Executive Publisher
 

View all posts

Leave a Comment

Subscribe to our Newsletter for Free!

Subscribe to our newsletter to receive the latest real estate news.