Tobacco tax eyed as alternative revenue source if oil excise tax suspended

MANILA, Philippines — The excise tax on fuel under the government’s tax reform law should be immediately rolled back, one minority senator said on Tuesday, as an increase in levies on cigarettes and tobacco products is being eyed to offset possible revenue losses from the said move.

Sen. Paolo Benigno “Bam” Aquino IV said that an immediate rollback of the petrol excise tax, instead of a simple suspension, was needed to help Filipinos cope with the rising prices of goods and services.

He also reiterated his position on Tuesday that suspending the excise tax on fuel under the Tax Reform for Acceleration and Inclusion in 2019 would be too late.

“Workers and people from different sectors are already crying for help. Let us take action and roll back the excise tax on petrol,” Aquino said after labor groups urged for legislation mandating a P750 nationwide minimum wage.

Aquino said that the government must admit the problems spawned by the tax reform law which kicked into effect on January 1 and find solutions to lower the prices of goods and services.

The Liberal Party senator, one of four members of the Senate to vote against the tax measure, filed Senate Bill 1798 which would mandate the roll back of excise tax once the inflation for the past three months exceeded official targets.

“More than P70 billion will be lost in revenues if we roll back the excise tax today. I hope the government forgoes this for the relief of Filipinos,” he said.

Sen. Juan Victor Ejercito, meanwhile, revived his proposal to increase tobacco excise taxes to help the government raise revenues in the event if it decided to suspend TRAIN’s excise tax on fuel.

During the deliberations on the TRAIN law, Ejercito said that he suggested the increase in tobacco and excise taxes instead of imposing oil levies as he was worried over the latter’s impact on inflation.

He said that his proposal would help the administration raise money for its projects and at the same time lessen the number of smokers in the country.

Sen. Grace Poe said that Congress should study the TRAIN law and see if there was a need to amend it to put in place more safeguards in the event of rising inflation, a move supported by Vice President Leni Robredo.

Robredo said that the reevaluation of the law was needed as prices continued to rise despite assurances during the law’s deliberations that its impact would be minimal.

Poe said that the excise tax on fuel could be suspended if the price of oil already hit $80 dollars per barrel, which the Department of Finance said was not possible under the law.

Both Poe and Robredo said that the proposal to peg the country’s minimum wage at P750 should be carefully considered, with all sectors being heard.

Robredo said that in deliberating on the proposal for a P750 minimum wage the situation of both employers and employees should be considered.