Tuesday, August 10, 2004 Government to implement oil import tax
MANILA -- President Arroyo is pushing for an increase of P2 per liter in excise taxes of petroleum products, even with the rising cost of fuel and as global crude oil prices trade near record highs.
Trade Secretary Cesar Purisima said the country needed to "squarely address" the budget deficit problem and raising excise taxes on oil imports from three percent to five percent would generate P29 billion in additional revenue yearly.
Purisima, designated as Arroyo's economic spokesman, said the proposal, which is contained in House Bill 1323 of Quezon Rep. Danilo Suarez, is "one of our most viable alternatives considering that it is easy to collect, monitor, and when necessary, adjust."
As consolation, Purisima said the Philippines will still have the lowest prices of petroleum products in the Southeast Asian region.
Some politicians, however, are cool to the idea, fearing that a hike in oil taxes will mean a further spike in fuel prices leading to dearer transport fares.
Senate ways and means committee chairman Ralph Recto, an Arroyo ally, urged the government to defer passage of the bill.
With oil prices soaring to 21-year highs, Recto said it would be an "uncaring government" that would levy higher oil taxes. He called for the bill to be "put in the backburner while oil prices are on a rampage."
Purisima said though that highly sensitive fuel products such as liquefied petroleum gas (LPG) could be spared from the proposed tax. He said diesel could also be exempted or levied a "much lower tax rate."
He assured the public that the Department of Trade and Industry (DTI) will exhaust all means to ensure that traders will not take advantage of the surges in oil prices.
"With our without these tax measures, the DTI will continue to monitor the prices of goods and bring to task these unscrupulous sellers who impose unwarranted burdens on consumers," he said. JMR/With AFP
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