Duterte: Don’t be so sad about being taxed

MANILA – President Rodrigo Duterte on Wednesday said the public
should not be “so sad about being taxed,” after he gave the
green light for the second tranche of the fuel excise tax hike
in 2019.

“Don’t be so sad about being taxed because your money during my
term is safe. I will not allow corruption,” Duterte said in his
speech during an awarding ceremony for model overseas
Filipinos.

Budget Secretary Benjamin Diokno earlier said the condition for
suspending the fuel tax hike would no longer be present next
year, and that the government stands to lose about P43.4
billion in revenues if the suspension pushes through.

The price of Dubai crude has fallen since the economic team
recommended last October the suspension of the fuel tax hike.
At that time, the price of the benchmark exceeded $80 per
barrel, the threshold under the tax reform law that will
require such a suspension.

The Development Budget Coordination Committee has revised its
assumption for Dubai crude in 2019 to $60 to $75 per barrel
from $75 to $85.

Diokno, meanwhile, said Dubai crude oil futures project further
decline below $60 per barrel in 2019.

Diokno noted that diesel’s peak price in 2018 was P49.80 per
liter and it will be P37.76 in Jan. 2019, inclusive of the P2
peso excise tax. For gasoline (95 octane) it was P60.90 at its
peak, and it will be P50.82 in Jan. 2019, also inclusive of P2
additional excise tax, he said.

Presidential Spokesperson Salvador Panelo said Duterte heeded
the recommendation of his economic managers to push through
with the hike because of reduced global oil prices and its
impact on the government’s budget and infrastructure programs.

“If you suspend it, then it will affect your budget, the
personnel services of the national government. If you do that,
we will be losing P43 billion in revenues,” Panelo told ANC.

“It will affect the entire services, budgets, infrastructure
programs of the government and that will be bad for the
people.”

The Tax Reform for Acceleration and Inclusion (TRAIN) scheduled
excise tax increases every year for 3 years starting Jan. 1,
2018, when duties were increased by P2.50 per liter for diesel,
P1 per kilo of LPG, and P2.65 per liter of regular and unleaded
gasoline.

TRAIN imposed excise taxes on diesel for the first time while
the levy on regular and unleaded gasoline was raised to P7 from
P4.35.

The economic team earlier recommended the suspension of the
second tranche as inflation hovered at near 10-year highs. The
price increases steadied at
6.7 percent
in September and October, but it tapered to

6 percent
in November.

GOV’T ‘INSENSITIVE’

Meantime, the 8-man opposition senatorial slate in the 2019
polls called the government insensitive for pushing through
with the imposition of higher taxes on fuel.

“The recent announcement of the government that it plans to
continue the imposition of fuel excise tax only proves the
government’s insensitivity to its impact on the people. Here
comes this government’s economic managers announcing its plan
to continue imposing this tax in January 2019 when they have
not even addressed its consequences that brought our people
suffering from the increase in prices the past months,” said
former House Deputy Speaker Lorenzo Tañada, one of those
running in the opposition coalition.

“It is clearly senseless for the government to announce the
suspension of the fuel excise tax and then withdrawing it. We
demand the government to explain why it was not able to
implement the mitigation measures, all the support that they
promised to extend to the poor who will be negatively affected
by this tax policy.”

Opposition Senator Bam Aquino also urged the government to
shelve the plan.

“This sudden change of heart is baseless because inflation is
still higher than their target,” Aquino said in a statement.

“This means we are still in the middle of a crisis of
skyrocketing prices of goods, that’s why pushing through with
the increased fuel excise tax is wrong.”

Meanwhile, Senator Risa Hontiveros said the flip-flopping
“exposed the government’s ‘wobbly policy’ in protecting the
public from the negative impact of unstable oil prices.”

“If the government failed to foresee the depth and gravity of
the impact of volatile international oil prices on our
inflation rate, what makes it think that the overall economic
environment is turning around for the better? Isn’t it more
prudent to continue to allow the safety nets, such as the
suspension of the fuel excise tax, to take full effect to
shelter the people in an uncertain economic climate?”
Hontiveros said.

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