DOE to oil companies: Tell public when you're imposing higher fuel tax

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Metro Manila (CNN Philippines, January 6) — The Department of Energy (DOE) said it will require oil companies to inform the public when they will hike fuel prices due to the tax reform law.

"The gasoline stations should post for the public to know that they are already charging excise tax for kerosene, gasoline or diesel," Energy Undersecretary Wimpy Fuentebella told CNN Philippines on Saturday. "Kasi there can be a situation na may excise tax na si diesel at wala pang excise tax si gasoline or si kerosene."

[Translation: Because there can be a situation that there is already excise tax on diesel, but no excise tax yet on gasoline or kerosene.]

"Anong effect na 'pag walang naka-post? Para tayong nakikipag-date sa isang lalaki o sa isang babae na hindi nagsasabi ng totoo. So bakit ka pa bibili diyan?" Fuentebella added.

[Translation: What's the effect if there's nothing posted. It's like we're dating a man or a woman who isn't telling the truth. So why would you buy at that station?]

The tax reform law, which was implemented on January 1, increases the excise tax on all fuel products.

In 2018, gasoline prices will be higher by ₱2.97 a liter, diesel will cost ₱2.80 a liter more and kerosene will cost ₱3.36 a liter more.

However, the DOE said on Wednesday that the hikes will only take effect after January 15.

Read: No fuel price hike under tax reform law until mid-January

Fuentebella said the implementation of the excise tax is not dependent on time.

"It is dependent on the stocks that we have. Kasi 'yung nandoon sa mga gasoline stations ay may old stocks na hindi pa china-charge noong January 1," he said.

[Translation: The fuel at the gasoline stations are old stocks that have not yet been charged the higher excise tax on January 1.]

Shell Philippines communications manager Cesar Abaricia said in a Saturday statement that the company will only implement the tax once it finishes its old inventory.

"We will comply with Department of Energy's directives to oil companies that the implementation of the excise tax under (the law) shall not be applied unless 31 December 2017 inventory of finished products are fully exhausted," Abaricia said.

Fuentebella said the Energy Department will also require oil companies to submit their list of inventories.

"Para tayong parent sa ating mga anak," he said. "Walang magpo-profiteering or walang unjust enrichment on any part of them kasi it may result to a violation of the law."

[Translation: We're like a parent to our children. There should be no profiteering or unjust enrichment on any part of  them because it may result to a violation of the law.]

Fuentebella added the DOE will conduct random checks of oil refineries, depots and gasoline stations to ensure that oil firms are following the law.

Give tax reform a chance

Meanwhile, a lawmaker called on the public to give the tax reform law a chance.

"Hindi fair na kailangan husgahan na itong (batas) sapagkat ilang araw pa lang naging effective sa bansa," Deputy House Speaker Fredenil Castro said in a Saturday forum. "Ang intensyon dito o ang balak ng ating pamahalaan ay para mapangalaagan ang kalusugan ng ating mga mamamayan."

[Translation: It's not fair to judge this law since it's only been effective in the country for a few days. The government's intention is to protect the health of our people.]

Among the provisions of the law are higher taxes on tobacco and sugary beverages like softdrinks.

Read: Lower income tax, higher taxes on sugar, petroleum, tobacco products by 2018

But think tank IBON Foundation is unconvinced.

"Ang tingin namin, smoke screen lahat 'yan from basic tax package na gustong bawasan ang buwis ng mayaman at dagdagan ang buwis ng mahihirap," said Sonny Africa, the foundation's executive director, at the same forum.

[Translation: We think these are just smoke screens from the basic tax package that wants to lessen taxes on the rich and hike taxes on the poor.]

Africa explained that, at most, only six to seven million Filipinos will benefit from the new tax law, or those who are exempted from the income tax.

"Para sa amin, ang pinaka-pabigat ng (batas) is for the 15 million families, poorest families na walang income tax gain, pero they'll be paying higher taxes because of the other elements of (the law)," he said.

[Translation: For us, the biggest burden of the law is for the 15 million families, poorest families that have no income tax, but they'll be paying higher taxes because of the other elements of the law.]

Under the measure, those earning up to ₱250,000 annually or around ₱22,000 a month will be exempted from paying taxes, including self-employed individuals. The bill also exempts 13th month pay and bonuses amounting to ₱90,000 from taxation.

The law will face legal scrutiny as the House of Representative's Makabayan bloc, comprised of progressive groups, is set to question the law's constitutionality before the Supreme Court this week.

Africa said he believes the entire law should be struck down and that the Finance Department should instead tax the rich with higher rates at 10 to 20 percent.

CNN Philippines Correspondent Anjo Alimario and Multi-Platform Writer Regine Cabato contributed to this report.