House rips DoF over tax retreat

With a serious crisis threatening the country, members of Congress slapped down the Department of Finance (DoF) over conflicting information regarding the government’s fuel tax plan during a joint committee hearing on Wednesday.

As part of the Joint Committee on Legislative Energy Action and Development hearing on the proposed suspension of the excise tax on fuel, committee chairperson Miro Quimbo asked Finance Undersecretary Karlo Adriano to explain the government’s decision to maintain the excise tax on gasoline and diesel.

On 13 April, President Ferdinand Marcos Jr. announced the suspension of the excise tax on liquefied petroleum gas (LPG) and kerosene only, which took effect the next day.

Adriano responded that the department was still undergoing a monthly review by the Development Budget Coordination Committee (DBCC) before considering suspending the tax on both diesel and gasoline.

The undersecretary asserted the DoF’s consideration hinged on who would benefit the most from enacting such a ruling which, in the case of LPG and kerosene, was the vulnerable sector.

When it came to diesel and gasoline, however, Adriano said the highest consumption of these oil products was observed in the richest sectors of society, based on the Philippine Statistics Authority’s Family Income and Expenditure Survey.

This information alarmed Quimbo and his co-lawmakers, who stated that the DoF had not previously mentioned this, saying only that they were awaiting the instruction of President Ferdinand Marcos Jr. to suspend the excise tax on the petroleum products.

The solons were confused when Adriano said the tax cut would translate to P38 billion to P39 billion in lost income for the government over three months, noting that it amounted to roughly P430 million in losses per day.

“So you mean to say, based on that P430 million, the excise tax collection will be P154 billion in one year? That’s not the data you presented to us before,” Quimbo said.

The Marikina 2nd District representative said the amount conflicted with the DoF’s previous presentation of the supposed revenue for the whole year from all excise taxes, which did not exceed P140 billion.

“I’m sorry I asked this, because each time we ask, when we want to project the collection, you give us a lower number; when we ask you for the loss, it becomes bigger,” he said.

Quimbo noted that the DoF had affirmed at a prior hearing that the government would be able to afford the tax cut on all petroleum products.

He said there has been a disconnect between the finance agency’s findings and the oil companies’ capacity to absorb the impact of the lost revenue.

“When we had hearings before, we never heard of this, you never told us. You never told us that 50 percent of retail consumers were in the top three deciles,” he said.

Cagayan de Oro 2nd District Rep. Rufus Rodriguez and Cavite 1st District Rep. Jolo Revilla, on the other hand, sought to rebut the notion that excise tax reductions would only benefit the rich.

Rodriguez noted that the rich made up only 1.5 percent of the population, while the vast majority of Filipinos were directly affected by the ongoing crisis.