When it rains, it pours,
After the more than 2-peso rollback in the price of fuel (gasoline and diesel) this week, news comes in that Executive Secretary Salvador Medialdea – as acting OIC while President Duterte is abroad for two major summits – has approved the suspension of the next tranche of the fuel excise tax.
Set to be implemented in 2019, the Republic Act (RA) 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) law would have added another Php 2 to the price of gasoline and diesel.
The decision to suspend the fuel excise tax is based in part on the recommendation of the President’s economic managers and Section 43 of RA 10963, which stipulates that the fuel excise tax may be suspended should global oil prices average US$ 80 per barrel in the last three months of the year.
While this news is a welcome development to many, the Department of Finance (DOF) views the suspension differently.
According to Finance Secretary Carlos Dominguez, the deferral of RA 10963’s implementation in 2019 could result to a revenue loss for the government amounting to Php 41 billion.
A review is set to be conducted by the DOF six month after the suspension, which takes effect in January 2019.