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Wednesday, January 09, 2008
Arroyo orders 1% tariff cut on oil products
MANILA -- President Gloria Macapagal-Arroyo ordered a one percentage point reduction in the tariff on oil imports as part of the mitigating measures on the rising world oil prices.
This would lower the oil import tariff from three to two percent.
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Arroyo said the executive order embodying her directives will be released Wednesday. The order would take effect two weeks after publication.
She also said the measure would not hurt government revenues, unlike other proposals that included suspending the Value Added Tax (VAT) of 12 percent on oil products.
The VAT is the government's centerpiece tax reform to help narrow the budget deficit.
However, Senator Mar Roxas, a former trade secretary, said the tariff cut ordered by Arroyo would hardly have any effect on soaring fuel prices and reiterated his proposal for the suspension of the 12 percent value added tax on oil products.
"We will only let the people's suffering continue if we do not act now to suspend the VAT on oil," Roxas said.
Prominent left-wing group Bayan said it was planning street protests aimed at forcing the government to take more drastic steps to ease difficulties faced by the public due to high oil prices. It warned Arroyo of possible public unrest, including transport strikes, if such difficulties were not addressed.
"Arroyo's token efforts would not stop this issue from building up to a boiling point this year," Bayan Secretary-General Renato Reyes said.
Finance Secretary Margarito Teves said the tariff rate would still be lowered by another one percent because the current world prices have reached the trigger for that level.
He said the trigger point for a reduction to two percent tariff is US$80.94 per barrel for crude and US$110 for diesel.
For a reduction to one percent tariff, the trigger point is US$93.28 per barrel for crude and US$115.65 for diesel.
To bring down the tariff rate to zero percent, the price of crude has to reach US$106 per barrel.
Teves said the reduction would be "revenue neutral." (JMR/Sunnex/AP)
For more Philippine news, visit Sun.Star Bacolod. (January 9, 2008 issue)
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