Marcus De Guzman / AutoIndustriya.com | September 25, 2017 15:44
Approved Senate version sees lower incremental price increase of petrol products
The recently passed Senate version of the taxed reform bill (TRAIN) SB (Senate Bill) 1592 has shown a more rationalized taxation of cars compared to the version passed by the lower house. What is often overshadowed by the fear of higher car prices are the impending increase in petroleum products due to additional levies.
The proposed tax hikes will be done in three increments as with House Bill 5636. The Senate's version will however introduces slightly damped increase compared to the Congress' version for the first two years. Originally, the Deparmtent of Finace (DOF) proposed an immediate increase of PhP 6.
Under SB No. 1592, the excise tax on most petroleum products will increase per year. Kerosene is expempted from the increase, citing that remote areas depend on this type of fuel for cooking and lighting.
Beginning in 2018, the excise tax on gasoline will increase by Php 1.65 (from Php 4.35 to Php 6.00), while diesel will now be levied Php 1.75. Liquefied Petroleum Gas will likewise see a Php 1.00 levy from previously none.
For 2019, the excise tax will increase by another Php 2.00 for gas and diesel, and another Php 1.00 for LPG.
In 2020, the excise tax for fuel will go up by Php 2.00 for gasoline, PhP 2.25 for diesel and Php 1.00 for LPG.
Given the huge increase that will placed on fuels and other petroleum products, logistics costs and pricing of basic commodities are also expected see a slight uptake.
A special provision in the Senate Bill allows for suspension of excise taxes if crude oil price exceeds eighty Dollars (USD 80) per barrel, cost, insurance and fright (CIF) or when the inflation rate exceeds the higher end of the annual inflation target range set by the Development Budget Coordinating Council (DBCC) and Banko Sentral ng Pilipinas (BSP).
With both the Congress and Senate having their own version of the tax reform bill, both houses will have to convene and agree on a unified tax reform bill before it gets passed into law.