The House of Representatives Committee on Ways and Means on Thursday approved a substitute bill suspending excise tax on diesel, kerosene, and liquified petroleum gas—and reducing the rate for other oil products—for six months.
During its online meeting, the committee approved the substitute bill—mainly based on House Bill No. 10438 filed by ways and means committee chairman and Albay Rep. Joey Salceda—which seeks to reduce excise taxes on diesel, kerosene, and liquified petroleum gas to zero.
The measure also lowers the excise tax on low-octane gasoline to P4.35, but retains current taxes on premium gasoline which is set at P10.
“It’s immediate relief for Filipino families, especially affected sectors. The bill will cost the government around P45 billion, but what the government loses, the consumer gains,” Salceda said in a statement.
The suspension and reduction shall take effect for six months upon the effectivity of the measure.
Salceda said there is a self-correcting mechanism in the bill.
“We embedded a mechanism for reverting it back to TRAIN rates if the prices normalize. If it goes back to 65 dollars per barrel of crude oil, then the excise tax rates will also normalize,” Salceda said.
“The premise of this tax relief bill is that the situation is not normal. If inflation weren’t so high, we would be discussing other matters. But now, consumers are hurting. Inflation is high. Incomes are depressed so, immediate relief is obviously necessary,” he added.
The bill will now be transmitted to the House plenary for further debates. Salceda said the House hopes to turn over the bill to the Senate by the third or fourth week of November.