Tax Cut on Fuel Being Considered, According to New DTI Secretary

Incoming Trade Secretary Alfredo Pascual brought up the potential elimination or reduction of the excise tax on oil. According to Pascual’s recent interview, talks about the matter are currently underway, especially since it is a viable, short-term solution to the rising oil prices. Although this is the case, Pascual also brought up that while the tax cut for fuel may seem like a promising solution, it also comes with several downsides.

For starters, eliminating or reducing excise tax on oil would bring down revenue for the government. However, at this point, any measures the government would take would have consequences. “Solusyon ‘yan sa pagpapababa ng presyo in that sense nga, meron control din ang government, kasi isang component ng presyo ay ’yung taxes,” Pascual explained. “Yung revenue ng government bababa. ‘Yung budget funding mababawasan. Paano naman ‘yung tulong sa 4Ps [Pantawid Pamilyang Pilipino program], o ‘yung education na sina-subsidize ng gobyerno.”

(“That is the solution to lowering the price in that sense, the government also has control, because a component of the price is the taxes. The government’s revenue will go down and the budget funding will be reduced. We’re also studying the assistance to the 4Ps or government-subsidized education.”)

Pascual further notes that the present situation in the Philippines can be likened to a “zero-sum game.” A move that may favor certain sectors may not be favorable for others. It is all a balancing act, and some trial and error must be done to lock down the best possible solution for all.

Additionally, Philippine Chamber of Commerce and Industry (PCCI) President George Barcelon added his thoughts on the matter, saying that there is no “one-size-fits-all” solution. Everything is connected, and there is pressure coming from all fronts. According to Barcelon, the private sector and the government must collaborate to come up with effective and efficient solutions to the current crises.

Source: BusinessMirror