‘Government to lose P700 million monthly in excise tax suspension’

MANILA, Philippines — The government stands to lose at least P700 million a month in revenues after President Marcos suspended the excise tax on liquefied petroleum gas (LPG) and kerosene, Customs Commissioner Ariel Nepomuceno said yesterday.

“If we will base it during the previous suspension from April to July, we will also lose a lot. We will lose at least P700 million a month. But we understand, of course, because the times are different now, there are crises. We also need to support our countrymen, especially those who are struggling,” Nepomuceno said.

Finance Secretary Frederick Go, who also sits on the Development Budget Coordination Committee (DBCC), said the resolution is similar to the previous three-month fuel tax relief measure, excluding diesel and gasoline.

Go explained that the covered fuel products are commonly used by vulnerable households for cooking and other daily needs.

“Our consumption of LPG and kerosene is also high. During the suspension (of excise taxes on LPG and kerosene from April to July), the total revenue lost was almost P3 billion,” Nepomuceno said.

He said suspending diesel and gasoline would mean more losses for the government.

“According to the Department of Finance, although suspending the excise tax on gas and diesel will help a lot, the losses would be bigger. That’s probably over P10 billion. That’s why, of course, the DBCC is studying it. It doesn’t seem to be the direction. Because direct assistance through the suspension of LPG and kerosene is more effective,” Nepomuceno added.

He said the BOC will try to find other sources of income to recover the losses from the suspension of excise taxes on LPG and kerosene.

“Our commitment is really to maintain our good collection, and second, we will find ways to increase our revenue collection,” Nepomuceno said.

Business groups and other sectors are asking the government to suspend the bigger 12-percent value-added tax on all petroluem products, warning that soaring fuel prices are passed on to consumers and fuel inflation.

Energy Secretary Sharon Garin certified that the average price of Dubai crude oil in the past month breached the $80-per-barrel threshold, which has been transmitted to the inter-agency DBCC for evaluation.