DOF: Impact of additional fuel excise tax hike to hit within next two weeks

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Metro Manila (CNN Philippines, January 3) — The Finance department said consumers can expect to feel the effects of the additional excise tax on fuel products around the second or third week of January.

The second excise tax hike imposed by the Tax Reform for Acceleration and Inclusion (TRAIN) Law adds ₱2 per liter of gas, ₱1 per liter of kerosene, ₱2 per liter of diesel, and ₱1 per kilogram of cooking liquified petroleum gas and came into effect on New Year's Day. However, oil companies should not hike pump prices until their oil stocks from last year have been depleted.

While the Energy department expects oil firms to apply the additional excise taxes by the middle or end of the month, it has received reports from Petron that their retailers in the following areas have implemented additional excise taxes:

Concepcion, Tarlac

Subic, Zambales

MacArthur Hwy, Sto. Tomas, Pampanga

Brgy. Dakila, Malolos, Bulacan

Sta. Ana, Pampanga

Lubao, Pampanga

Energy undersecretary Wimpy Fuentebella said Friday that gas retailers that impose the added taxes on its products early would be probed and asked to explain their reasons for doing so by the Energy department.

Some gas retailers could be implementing the second fuel excise tax hike this early due to higher turnover rates or smaller storage capabilities, Fuentebella said.

"We are reminding our oil players to implement the [fuel excise tax] properly and for our consumers to be vigilant para ma-monitor nang maigi, na tama ang kinokolekta at hindi tayo pwede maisahan. [so it can be monitored properly, that they are collecting correctly and we are not being fooled,]" he said.

But the blow of added taxes on fuel products may be softened by lower crude oil prices in the world market, which translates to fuel rollbacks locally, Finance Assistant Secretary Tony Lambino told CNN Philippines' The Source on Thursday.

"It will potentially be the case that the rollbacks will happen more or less at the same time as the increase in the excise. So in the receipt, you would see that there is an increase in the excise, but the final price still remains to be seen for consumers," Lambino said.

The government is warning oil companies which would implement the additional excise tax without depleting their old stocks first that they would be subject to "severe" penalties, which include closure and "large-scale" estafa charges.

The Energy department has required oil companies to submit notarized daily operations reports on their oil inventories, monthly reports and annual reports for the closing of December 31, 2018. It is also requiring gas stations to post notices when they have began implementing the additional excise tax.

The law requires oil companies to maintain an oil inventory that would last for at least 15 days.

Lambino said the government expects to generate ₱40 billion in revenues out of the added excise taxes on petroleum products, 70 percent of which would be used to fund infrastructure projects and the remaining 30 percent to be used to aid poor Filipinos who would be impacted by higher prices brought by higher taxes imposed by TRAIN.

The TRAIN Law, the first in four tranches of the Duterte administration's tax reform program, slashed personal income taxes but jacked up excise taxes on certain goods and services.

Lawmakers have previously criticized implementing agencies for the slow rollout of social mitigating measures, like the unconditional cash grant amounting to around seven million households and three million senior citizens, and the Pantawid Pasada fuel assistance program for jeepney drivers under legitimate franchises.

Lambino admitted that there were lapses in the government's implementation of these social mitigating measures.

"Admittedly there was a delay in the rollout of these programs. We should have done this faster, and we should have done it in a more widespread manner right away," he said.

For 2019, the government is expected to distribute at least ₱2,000 a month to beneficiaries of the unconditional cash transfer program and ₱10,000 to ₱20,000 for the entire year to jeepney franchises under the Pantawid Pasada program. Lambino said they have already planned the rollout of these programs last year to avoid any delays.