House panel backs bill allowing fuel excise tax suspension

The House Committee on Ways and Means on Tuesday approved a substitute bill authorizing President Ferdinand Marcos Jr. to suspend or reduce excise taxes on petroleum products to cushion the impact of rising global oil prices amid escalating tensions in the Middle East.

The panel consolidated 15 bills and two joint resolutions, including House Bill No. 8292 filed by Speaker Faustino “Bojie” Dy III and Ilocos Norte Rep. Ferdinand Alexander “Sandro” Marcos.

The proposal seeks to grant the President temporary authority to suspend fuel excise taxes during periods of national or global economic emergencies.

The substitute measure also incorporated House Bill No. 5779 filed by Leyte Rep. Ferdinand Martin Romualdez, which proposes removing excise taxes on fuel by amending Republic Act No. 10963, or the Tax Reform for Acceleration and Inclusion (TRAIN) Law.

Committee chair Marikina Rep. Miro Quimbo declared the substitute bill approved after Manila Rep. Rolando Valeriano, a vice chair of the committee, moved for its adoption without objection.

Valeriano also moved for the approval of the corresponding committee report and its immediate filing with the House Bills and Index Service, paving the way for the measure to be transmitted to the plenary for deliberation.

Under the bill, which seeks to amend the National Internal Revenue Code, the President may suspend or reduce excise taxes on petroleum products upon the recommendation of the Development Budget Coordination Committee in coordination with the Department of Energy.

The Development Budget Coordination Committee is composed of the Department of Budget and Management, Department of Finance, Department of Economy, Planning and Development, and the Office of the President, with the Bangko Sentral ng Pilipinas serving as adviser.

The authority may be exercised if the average Dubai crude oil price based on the Mean of Platts Singapore reaches or exceeds $80 per barrel for one month before the suspension order.

It may also be triggered if the President declares a national emergency or calamity that results in extraordinary increases in domestic fuel prices, as certified by the energy secretary.

Any suspension or reduction may apply to specific petroleum products and may be implemented either as a full suspension or partial reduction of excise taxes.

The measure allows the suspension to remain effective for up to six months and may be extended for a maximum aggregate period of one year, subject to congressional action.

The authority granted to the President will remain in effect until 31 December 2028.

The bill also requires the President, through the finance secretary, to submit a report to Congress within 15 days of issuing the suspension order and every month thereafter, detailing the basis for the decision, the estimated foregone revenues, and its projected impact on inflation, fuel prices and economic activity.

Before the panel approved the proposal, Quimbo explained that the measure was crafted as an amendatory bill instead of a House resolution.

“For the record, right now, the way things are moving, in fact, meron nang announced na presidential certification of urgency, wala na talaga nagiging difference whether it’s a House resolution or a bill,” Quimbo said.

“But I think more significantly, with due respect to everyone, as a lawyer, when you amend a tax code — which effectively is what we are doing — a House resolution will sometimes have dubious effectivity,” he added.

Quimbo said a House resolution merely expresses policy direction and does not carry the same legal force as an amendatory law.

“This is simply a delegation of a legislative power, which Congress has done many, many times. In fact, in that very same provision on Section 148, there’s already a delegation there,” Quimbo said.

He added that the proposal contains safeguards governing how and when the authority may be exercised.

“It’s clear. It has one standard, which is the price of MOPS. Second, the exercise of that power cannot last more than six months. It can be extended for a year, and in fact, that exercise cannot go beyond 2028,” he said.

“Third, the President can only mandate the suspension if there is a specific recommendation, not just by one, not just by two, not just by three, but by six Cabinet members all joined together declaring that there is a need to suspend,” Quimbo added.