MANILA: President Ferdinand Marcos Jr on Wednesday (March 25) signed into law a bill authorising him to suspend or reduce excise taxes on petroleum products, as the country continues to feel the impact of rising oil prices caused by the conflict in the Middle East.
Republic Act No. 12316 states that the sitting president, upon the recommendation of the Development Budget Coordination Committee (DBCC) and in coordination with the Secretary of Energy, may suspend or reduce excise taxes on fuel if the average Dubai crude oil price reaches or exceeds 80 US dollars per barrel for one month.
“The suspension or reduction may be applied to specific petroleum products and implemented either as a full suspension or partial reduction of the applicable excise tax rates under this Section, as may be warranted by prevailing conditions,” it read.
The law further states that any suspension or reduction shall be effective for no more than three months, with the total duration of all extensions not exceeding one year.
Moreover, excise taxes on fuel products will automatically revert to normal rates without further legislative or executive action when oil prices fall below 80 US dollars per barrel or when the three-month period ends.
The law notes that these emergency powers to suspend or reduce excise taxes on petroleum products may only be exercised until Dec 31, 2028.
RA 12316 also requires the President, within 15 days of implementing a suspension or reduction, to submit a report to the Senate and House of Representatives—through the DBCC in coordination with the DOE—detailing the factual basis and policy goals for the action, the estimated foregone revenues, and the social benefits affected for different household groups.
The President must also report on the expected impact of the suspension or reduction on inflation and fuel prices, as well as provide a cost analysis and assessment of possible market distortions.
“The report shall include a recommendation on whether the suspension or reduction of excise taxes should be maintained, modified, or lifted, and shall form part of the basis for any continued suspension or reduction,” RA 12316 read.
“During the suspension or reduction of excise tax under this Section, oil companies shall submit to the DOE monthly information on the cost components of the price of petroleum products sold,” it also read. - Philippine Daily Inquirer/ANN
