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Solons are urging the government to postpone gasoline tariffs in the face of rising oil costs.

MANILA, Philippines β€” Despite the government’s preference for subsidies over excise tax suspension, lawmakers in the House of Representatives continued to advocate for the suspension of fuel taxes on Wednesday to alleviate the burden of rising oil prices.

Rep. Precious Castelo of Quezon City sponsored the filing of House Resolution 2529, which requested President Rodrigo Roa Duterte to help in the country’s “fuel crisis.”

The resolution also encouraged Duterte to accept measures to temporarily suspend excise taxes on petroleum products in the wake of Russia’s invasion of Ukraine and the ongoing coronavirus pandemic, which it described as “overwhelming.”

The suspension of fuel taxes, according to Deputy Speaker Rufus Rodriguez, will provide immediate relief to Filipinos from rising gasoline, diesel, and other oil prices.

Rodriguez has introduced legislation that would postpone fuel tariffs for four years, until 2025.

Those in the public transportation sector who have benefited from the government’s targeted financial support program, he said, believe that it is insufficient.

“They believe that suspending excise taxes whenever petroleum prices are high would be more impactful and have a broader impact on the populace,” he said.

He did agree, however, that the tax suspension idea would result in a revenue loss for the government.

“I understand the Department of Finance’s (DOF) point of view. However, the loss is just temporary, as the collection will begin once crude oil prices fall. Furthermore, the 12-percent value-added tax would remain in place, and VAT (value-added tax) receipts will rise when petroleum prices rise, he said.

He noted that the increased VAT collection will partially compensate for the revenue loss caused by the suspension of excise taxes.

He went on to say that the government may enforce forced savings in order to make up for lost revenue.

“It is self-evident that it will benefit every Filipino, rich or poor.” In fact, I believe it will have a greater impact on the impoverished than it will on the wealthy,” he stated.

The government prefers targeted subsidies over the suspension of excise taxes on gasoline goods, according to DOF Undersecretary Paola Alvarez, because the latter has a long-term detrimental impact on government revenues and the economy.

According to Alvarez, higher-income households consume the most fuel, accounting for roughly 48.8% of total consumption, while lower-income households consume around 13.8 percent.

As a result, while the suspension of the excise tax on fuel products will benefit higher-income households, it will be detrimental to the government due to lower tax collection, which will have an impact on the poor because the government will have less funding for its social services programs, she explained.

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