Many have been calling for the suspension of excise tax since fuel prices started reaching all-time high levels. It isn't just a matter of the executive or the legislative putting the brakes on it via an EO or RA to amend the TRAIN law; removing the excise tax would prevent the state from raising revenue for basic services and projects.

With another major oil price hike looming thanks to OPEC (or perhaps even as series of hikes), a Representative has come up with perhaps a compromise measure to continue collecting excise taxes while managing the prices of fuel products. Occidental Mindoro Rep. Leody Tarriela has filed House Bill No. 3628, and it aims to gradually decrease excise tax as fuel prices increase.

Currently, there is a PHP 10 and PHP 6 excise tax on gasoline and diesel since Republic Act No. 10963, more commonly known as TRAIN law was enacted in 2017. HB 3628 aims to bring that down to as low as PHP 4 and PHP 3 respectively depending on the prices of fuel.

Under the proposed HB 3628, the full PHP 10 excise tax on gasoline will only be collected if prices are at PHP 50 per liter or lower. If gasoline is priced higher than PHP 50, the excise tax shall gradually decrease by PHP 1 per liter for every PHP 5 price hike above. By our understanding, that means at PHP 55 per liter of gas excise will be at PHP 9 while at  PHP 60 per liter it should be at PHP 8, so on and so forth. Should gasoline prices reach PHP 75 or higher, then the excise tax will only be PHP 4.

The same scheme applies to diesel where the PHP 6 excise tax is pegged when prices are below PHP 50 per liter. However, the tax decreases by 50 centavo increments instead of PHP 1. If diesel prices reach 75 or higher, then excise will drop to PHP 3.

So for example, if HB 3628 was enacted into law under the current fuel prices of PHP 60 for gasoline and PHP 65 for diesel, then the excise tax should be only be PHP 8 and PHP 4.50, respectively.

With fuel prices looking more like a roller coaster rather than a see-saw affair these days, will a Republic Act that is based on HB 3628 be an effective measure to ease the burden of motorists?