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Economic managers back 'ayuda', reject suspension of fuel excise tax

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Vivienne Gulla, ABS-CBN News

<div class="embed-wrap"><figure data-feedback="fb:likes,fb:comments"><img alt="Pedicab drivers wait for passengers on January 22, 2021. Jonathan Cellona, ABS-CBN News" src="https://sa.kapamilya.com/absnews/abscbnnews/media/2021/news/01/23/pedicab-drivers-jc-1.jpg"/><figcaption>Pedicab drivers wait for passengers on January 22, 2021. <em>Jonathan Cellona, ABS-CBN News</em></figcaption></figure></div><p>Economic managers of the Marcos Jr. administration have thumbed down proposals to suspend the excise tax on petroleum products amid rising prices, saying it could negatively affect the economy. </p><p>Instead, the economic team is pushing for targeted assistance to the vulnerable sectors.</p><p>Socioeconomic Planning Secretary Arsenio Balisacan said a month-long suspension of fuel excise tax is &quot;very dangerous.&quot;</p><figure class="op-interactive"><iframe height="315" src="https://www.youtube.com/embed/JxwnAsMl3BQ?enablejsapi=1" width="560"></iframe></figure><div class="iwantbar">Watch more News on <a href="https://www.iwanttfc.com/#!/browse/Genres/News/tag_id_genres/id_news" target="_blank">iWantTFC</a></div><p>&quot;It’s quite inequitable. It’s quite a risk to our fiscal program. There are better ways of protecting the poor and vulnerable. We’d rather have the assistance program for the poor, for the jeepney drivers, tricycle drivers, than having a universal subsidy that tends to benefit disproportionately the rich,” he told the media in an interview after NEDA’s budget hearing at the House of Representatives on Tuesday night.</p><p>“Once you put it in place, it’s very difficult to remove it, because policies like that are populist,” Balisacan added.</p><p>“In the past, we have unsustainable deficits because of programs like that. It led to high interest rates, it led to a slowdown of the economy, and lower growth, therefore, lower investments. Even the middle class will be hurt in the longer term,” he noted.</p><p>Finance Secretary Benjamin Diokno earlier warned that the government would lose billions in revenue if it suspends VAT and excise tax on fuel. </p><p>Diokno said revenue losses may reach P72.6 billion for the last quarter of the year, or 0.3% of the country&#x27;s Gross Domestic Product (GDP). </p><ul class="op-related-articles">	<li><a href="https://news.abs-cbn.com/video/business/09/19/23/huge-damage-to-economy-if-govt-suspends-fuel-taxes-diokno">&#x27;Huge damage&#x27; to economy if gov’t suspends fuel taxes: Diokno</a></li></ul><figure class="op-interactive"><iframe height="315" src="https://www.youtube.com/embed/fK1yP_UVNF4?enablejsapi=1" width="560"></iframe></figure><div class="iwantbar">Watch more News on <a href="https://www.iwanttfc.com/#!/browse/Genres/News/tag_id_genres/id_news" target="_blank">iWantTFC</a></div><p>During the plenary deliberations on DOF’s proposed 2024 budget at the House of Representatives, progressive lawmakers pushed for the suspension of the fuel excise tax as pump prices increased for the 11th consecutive week. </p><p>DOF’s budget sponsor, Sultan Kudarat 2nd District Representative Horacio Suansing Jr., reiterated Diokno’s position.</p><p>“Hindi ba kinonsider ‘yung magiging domino effect naman nito sa ating mahihirap? Kasi pag bumaba ang presyo ng langis, ang transportation, iba pang utilities, maaapektuhan dito. Magdo-domino effect yan sa mga presyo ng products and agricultural products. Did you not consider that it would be advantageous to our poor sector?” ACT Teachers Party List Rep. France Castro asked.</p><p>“The intention of the pronouncement of the Secretary of Finance is that we should not suspend the collection of these excise taxes. What he wants is to provide targeted relief to vulnerable sectors. So magbibigay tayo ng UCT, targeted cash aid or fuel subsidies to the bottom 50% households or members of transport sectors, para ang benepisyo ma-deretso sa lower 50% ng population. Para hindi magka benepisyo ‘yung upper 10% of the population,” Suansing replied.</p><figure class="op-interactive"><iframe height="315" src="https://www.youtube.com/embed/BKFxfiTv2cU?enablejsapi=1" width="560"></iframe></figure><div class="iwantbar">Watch more News on <a href="https://www.iwanttfc.com/#!/browse/Genres/News/tag_id_genres/id_news" target="_blank">iWantTFC</a></div><div><br/><strong>WEALTH TAX</strong></div><p>Kabataan Party List Representative Raoul Manuel said the proposed tax on the country’s billionaires will generate over half a trillion pesos annually or five times the projected collection from proposed additional taxes on digital service providers, single-use plastic and sweetened beverage, which totals to around P97.9 billion.</p><ul class="op-related-articles">	<li><a href="https://news.abs-cbn.com/video/business/01/17/23/imposing-wealth-tax-an-uphill-climb-says-ex-bir-chief">Imposing wealth tax an &#x27;uphill climb&#x27;, says ex-BIR chief</a></li>	<li><a href="https://news.abs-cbn.com/business/01/16/23/9-richest-pinoys-wealthier-than-half-of-ph-population">9 Filipino billionaires wealthier than 55 million Pinoys: Oxfam report</a></li></ul><p>“If we are to compare, sabihin na natin ang ita-tax natin sa mga bilyonaryo 1% sa kanilang wealth kung P1 billion ang kanilang total wealth. Kung P2 billion naman, 2%. Tapos kung aabot ng P3 billion, 3%. We computed na on an annual basis, ang pwede nating ma-collect from the country’s 3,000 billionaires ay P502 billion on an annual basis. This is five times the total of all proposals by DOF na consumption taxes. Given na mas malaki siya at iilang tao lang din ang kokolektahan ng ganoong tax, I really can’t understand why DOF is really bent on additional consumption taxes rather than billionaires’ tax… Sana ito ang i-prioritize natin na tipo ng pagbubuwis para maging progressive ang tax,” he said during Tuesday’s interpellation.</p><p>“’Yung mga bilyonaryong ito, ‘pag tinax mo ito, mahihirapan tayo. Kasi ang bilyonaryo, gumagamit ng maraming dummy corporations… Paano natin i-tax siya directly? May corporations sila, may magagaling silang CPA, lawyer, nagkakaroon lang sila ng tax avoidance na tinatawag. Pero ‘pag ang basis ng taxation natin is consumption, ‘yung mayayaman ‘pag bumili ng mamahaling gamit, pwede mo sila agad i-tax. Masi-simplify natin ang tax collection,” Suansing responded.</p><div><strong>CREATE LAW</strong></div><p>The government’s forgone revenues due to the CREATE law, which seeks to reduce the corporate income tax rate in the country is increasing, according to Suansing. But he noted that the figures are lower than previous projections.</p><p>“So the trend on CREATE law is the loss is increasing from P68 billion in 2021, it increased to P80.4 billion in 2022,” Suansing said.</p><p>“Ang projection is P102 billion in 2023,” Castro added.</p><p>The CREATE law was signed in 2021 in a bid to attract more foreign investments and create more jobs. Suansing said as of July 2023, 80,591 jobs were created due to the measure. Majority of these are in the manufacturing sector.</p><p>“The projected losses due to CREATE were much higher. But after pandemic, more companies opened up their operations, that contributes to the decrease in projected losses due to CREATE,” Suansing said.</p><p>“Kung hindi naipasa ang CREATE, makakapag-generate tayo ng mas malaki sanang taxes. Ang corporation naman, kaya magbayad noyan ng taxes. Instead of imposing new taxes, kung ito ang pinagkuhanan natin ng revenue ay mas malaki pa sana ang mage-generate natin,” Castro commented.</p>

Economic managers of the Marcos Jr. administration have thumbed down proposals to suspend the excise tax on petroleum products amid rising prices.

Economic managers back 'ayuda', reject suspension of fuel excise tax

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Economic managers back 'ayuda', reject suspension of fuel excise tax

Vivienne Gulla,

ABS-CBN News

Published Sep 20, 2023 09:19 AM PHT

Read More:

oil prices

oil

pump price

House of Representatives

fuel prices

excise tax suspension

NEDA

Arsenio Balisacan

DOF

Benjamin Diokno

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