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New excise tax on petrol products will hit the poor -Tinio

26 January 2017 No Comment

PRESS RELEASE

26 January 2017

References: ACT Teachers Party-List Rep. Antonio Tinio (0920-922-0817)

 

New excise tax on petrol products will hit the poor -Tinio

 

At the House Ways and Means hearing, Wednesday, ACT Teachers Party-List Rep. Antonio Tinio slammed the proposed excise taxes on petrol products, saying that these are new levies that will be shouldered by low-income earners and poor families.

 

“Package 1” or the proposed total tax reform of the Department of Finance includes adjusted rates of excise taxes on petroleum products ranging from P6.00 to P10.00 per volume capacity in a span of three years.

Tinio noted that leaded and unleaded premium gas will be slapped with an excise tax of P7.00 per liter (from P5.35 and P4.35, respectively) in July 2017, P9.00 in 2018, then P10.00 in 2019.  Products with zero excise like kerosene, diesel, LPG, and bunker fuel oil will be taxed with P3.00 in 2017, P5.00 in 2018, then P6.00 in 2019 per volume capacity.

 

“This proposal will actually impose taxes where currently there are none, in the case of kerosene, diesel, LPG, and bunker fuel,” said Tinio.  “The DOF has yet to explain to the public: What is its justification for introducing new taxes when the existing regime has seen it fit not to tax these products?”

 

Rep. Tinio pointed out that the new excise taxes will greatly hit the low-income earners and poor families.  “In rural areas, for instance, the common mode of transportation are motorcycles or ‘habal-habal’, they also need generators for electricity—these all use the products which the DOF now wants to tax.”

“The DOF has yet to present hard data to substantiate its claim that the impact of new excise taxes will only be on the rich or high-income earners.  We should realize that while P9,000 to a high-income family is insignificant, P160 for the poor spells the difference between food on their plates and hunger for the family.”

 

The DOF earlier claimed to the House panel that its proposal will be borne more by the rich, with them paying P4,000 to P9,000 per year in excise taxes compared to poor families who will pay only P160.

 

Upon his inquiry, the DOF also admitted that a significant share of expected revenue from the new excise taxes will come mostly from diesel from 25% to 50%.  The inflation rate is also estimated to increase by 1.5%, or nearly double the current inflation rate of 1.8%.

 

“This means that the burden of this particular measure will fall heavily on the poor,” stressed Tinio.  “This new excise tax is therefore a regressive tax and we cannot agree to this.”

Tinio also argued that the proposal for lower personal income taxes should be “unbundled” from the Package 1, saying that there are no opposition to the income tax reform unlike the other reforms it is proposed with such as the excise taxes and VAT.

 

“We want income taxes to be lowered without any pre-condition, and we don’t want income tax relief for the people to be a hostage to more controversial proposals. The lowering of income tax might not push through if other taxes will not be approved. We all know that the lowering is urgent and necessary. I therefore suggest that the committee should proceed with, and approve, lower income taxes separately,” Tinio said. ###