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Thursday, April 27, 2006
Gov’t to cut dues on imported oil
MANILA - Oil import tariffs will be cut in the Philippines to cushion the impact of record-high crude-oil prices, the government said yesterday.
”The amount of reduction will depend on how much oil prices will further move,” Finance Undersecretary Gil Beltran told reporters. The Philippines’ import tariff on oil is at three percent.
Beltran said without elaborating that the country would reduce the tariff by one percentage point if the price of oil rises to a certain level, and by another percentage point if it hits a higher level.
Waive
It is also possible that the import tariff would be waived for the time being if oil prices continue to surge, he added.
President Arroyo’s government turned to excise tax reduction after the financial markets were spooked by a key aide’s statement that the government was considering suspending a 12 percent reformed value-added tax (RVAT) on fuel.
Finance department officials say that unlike a sales tax suspension, which can effect government revenues, tariff reduction could turn out to have a neutral impact on revenues.
Based on finance department estimates, every one percentage point cut in the oil tariff is equivalent to P2.5 billion in forgone state revenues.
On the other hand, finance officials estimate that every one-dollar rise in the price per barrel of crude oil means an additional P1 billion in tariff collections.
Finance Secretary Marga-rito Teves underscored the need for the government to hit its fiscal targets.
”Clearly, the RVAT collection from petroleum products contributes a lot to the government’s revenue-generation efforts,” Teves said in a statement.
In the first four months since the RVAT law came into force, actual collections of the tax on oil were P11.9 billion, or 77 percent of the P15.5 billion in gross revenues. (AFP)
For Bisaya stories from Cebu. Click here. (April 27, 2006 issue)
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