Fuel excise tax more burden than boon for poor — IBON

January 9, 2017

by IBON Foundation


Research group IBON said that the fuel excise tax being pushed by President Duterte’s economic managers will increase taxes on already burdened poor and low income wage earners. The group said that the Duterte administration should redesign the tax system to tax the richest who have the huge ability to pay more and relieve the majority who are struggling on low incomes.

The government plans to impose an excise tax on petroleum products to help generate revenues needed to fund the Duterte administration’s infrastructure projects. Previously tax-free fuel items such as diesel
used by buses and jeepneys, cooking gas, and bunker fuel used to generate electricity will have a tax of P6 per liter. Meanwhile, tax on gasoline will rise from Php4.35 to Php10 per liter. This will be in addition to the 12% value-added tax these products are already subjected to.

IBON said that this fuel excise tax is among proposed reforms under the government’s neoliberal tax package that will add further hardship to already struggling ordinary Filipinos.  Other reforms include the proposed decrease in the list of VAT-exempt items, and excise tax on sugary products.

These additional taxes will increase the prices of basic goods and services, and mostly affect poor and low-income consumers that are already struggling to pay for food and other basic needs. According to the September round of the IBON National Survey, seven out of ten Filipinos considered themselves poor. Also in the past three months, the survey showed that 64% of Filipinos had trouble paying for electricity and 53.3% had trouble buying enough food.

IBON said that the Duterte administration should instead focus its efforts on more efficient and aggressive tax collection on the wealthy and big corporations. Revenues generated should then be prioritized to
fund much-needed public utilities and social services. ###