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Excise tax on liquefied petroleum gas and kerosene suspended
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This translates to P3.36 per kilogram of LPG, or almost a P37 for every 12 kg tank, and P5.60 for every liter of kerosene
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12% value-added tax remains in effect as President Ferdinand Marcos Jr. cites the need for VAT revenues to fund aid programs
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Marcos also directed the Department of Agriculture and the Tariff Commission to look into reducing import duties on certain products to make them cheaper for consumers without compromising local farmers and fishers
The excise tax on liquefied petroleum gas (LPG) and kerosene in the Philippines has been suspended by the government as part of measures to provide relief to citizens from the impact of higher fuel prices due to the continuing Middle East crisis.
This means a decrease in the retail price of the two commonly used cooking fuel in the county.
The reduction is equivalent to P3.36 per kilogram of LPG, or almost a P37 for every 12 kg tank, and P5.60 for every liter of kerosene.
“We reduced the tax on petroleum products that are used directly by households daily under the power given to us by law… meaning lower costs for cooking and the daily needs of each family,” President Ferdinand Marcos Jr., speaking in Filipino, said in a press briefing.
The 12% value-added tax (VAT), however, remains in effect for LPG and kerosene along with other goods.
Marcos said lifting or even reducing VAT on fuel products will compromise government revenues that are intended for assistance programs.
“Here’s the thing with the VAT. Especially the VAT on oil, on petroleum products. The VAT on petroleum products, we are going to get a windfall profit from that because the price of crude oil increased,” he said.
“Right now, the balance, the cost-benefit analysis between the VAT collections and the benefit to people, to ordinary people, still favors that we collect VAT and we use the extra funds to provide the subsidies, to provide cash benefits, to provide all of those subsidies that we have been able now to provide, that we have to provide now to people to normalize people’s lives,” he added.
Prior to the announcement, LPG prices ranged from P1,200 to P1,700 per tank, depending on the location. Kerosene prices were around P154 to P177.19 per liter.
READ: Marcos declares National Energy Emergency as global oil supply risks mount
Marcos signed Republic Act 12316 in March, allowing him to temporarily suspend or reduce fuel excise taxes for up to three months per instance within a maximum of one year when Dubai crude oil prices exceed a certain per-barrel threshold.
He also signed Executive Order (EO) No. 110 on March 24, declaring a state of national energy emergency in light of the ongoing conflict in the Middle East.
The order authorizes Marcos to declare a critically low energy supply or imminent danger, and to implement the fuel and energy allocation plan and other energy conservation measures.
The EO also set up the Unified Package for Livelihoods, Industry, Food, and Transport (UPLIFT) program as the government’s coordinated, whole-of-government response framework.
Agriculture
In the same briefing, Marcos also announced that he has directed the Department of Agriculture and the Tariff Commission to look into reducing import duties on certain products to make them cheaper for consumers.
He did not provide further details, but assured that local farmers and fishers will be protected.
“That is the balance we are looking for… the economy is a complicated system,” he said.
READ: DA forms rice import TWG to stabilize supply, prices
The government has also lifted the payment of toll fees at fish ports and is looking at addressing wastage during harvest by ensuring that produce are properly distributed.
Marcos also cited that logistics costs should be reduced as port authorities such as in Cebu and Subic Bay have cut or suspended various fees.
“So that will reduce costs on anchorage, berthing fee, cargo handling, storage fees so that these are no longer factored into food prices,” he said.
READ: Prolonged Middle East crisis will drive up agri logistics costs– DA
