MANILA, Philippines – Rep. Carlos Zarate of party-list group Bayan Muna warned the public yesterday that the administration’s tax reform program would result in an increase in fuel prices of P6 to P10 per liter.
Such a huge adjustment would certainly hurt the poor, he said.
“We hope the Department of Finance (DOF) will follow President Duterte’s instruction to lift anti-poor and gender-biased taxes and not add more tax burden to the public,” he said.
Under the tax reform package unveiled by Finance Secretary Carlos Dominguez, the government seeks to impose an excise tax of P6 per liter on diesel and P10 on gasoline.
Zarate said oil companies would just pass on the tax to their customers.
This means the retail price of diesel and gasoline would go up by P6 and P10 per liter, respectively, he said.
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He said that since most, if not all passenger buses and cargo trucks use diesel, higher diesel prices would translate into higher fares and increased cost of consumer products like rice, fish, meat, and vegetables.
Diesel is currently excise-tax free.
The tax reform program also seeks to impose an excise tax on kerosene and liquefied petroleum gas (LPG).
Zarate disagreed with the DOF’s view that the plan would hurt the rich more than the poor.
He said higher fuel and consumer prices would hurt the poor sectors of society and middle-income groups more than the rich and corporate executives.
“Diesel, LPG and kerosene are used mostly by the poor,” he said.
Dominguez is also proposing an increase in tax on oil products to recoup expected revenue losses from the plan to reduce individual and corporate income tax rates.
Zarate said if the DOF plan pushes through, whatever amount the poor could save from the proposed income tax cut would be wiped out by an increase in fuel and consumer prices.
It is possible that the net effect of such a combination of proposals on low and middle-income groups would be negative instead of positive, he said.
