A measure has been filed in the Senate seeking to grant the President the power to lower the rate or suspend the value added tax or VAT on petroleum products for one year during national emergencies or state of calamities like the COVID-19 pandemic.
Sen. Imee Marcos, who filed the measure, said pandemic-hit Filipinos needed relief from fuel price increases triggered by higher excise duties on petroleum.
"These oil price hikes have had a noticeable domino effect on the prices of basic goods and services, such as agricultural products, transportation, food, electricity and other essentials," she added.
Since January this year, fuel prices have increased by P13 per liter for gasoline, P10 for diesel, and P9 for kerosene, Marcos said.
The higher cost of fuel products, she added, drove inflation higher than the government's target of 2% to 4% for 2021. Inflation hit 4.2% in January, 4.7% in February, 4.5% in March, April, and May, and 4.1% in June.
"The higher costs of goods and services that are, in part, due to the uptick of fuel prices, are expectedly passed on to the ordinary consumer who may still be unemployed but has no choice but to deal with the rising prices of everyday essential commodities," she said.
"As a means of easing the financial burden of the public, this bill proposes to grant the President of the Philippines the power to temporarily lower the rate or suspend the imposition of Value-Added Tax on petroleum products in times of national emergency or a state of calamity, such as this pandemic," she added.
While Marcos wants to give the president the power to lower or suspend VAT, she said excise taxes on petroleum products will still be retained to ensure the government's financial sustainability.