THE House Committee on Ways and Means on Tuesday approved a substitute bill that would authorize the president to suspend or cut fuel excise taxes during national or global economic emergencies.
The unnumbered measure, which consolidated 15 bills, seeks to amend the National Internal Revenue Code (NIRC).
“This is simply a delegation of a legislative power, which Congress has done many, many times. In fact, in that very same provision on Section 148 [of the NIRC], there’s already a delegation there,” Marikina 2nd District Rep. Miro Quimbo, the chairman of the committee, said.
“There is one standard [in the substitute bill], which is the price of MOPS (Mean of Platts Singapore). Second, the exercise of that power cannot last more than six months. It can be extended for a year, and in fact, that exercise cannot go beyond 2028,” Quimbo said. “Third, the president can only mandate the suspension if there is a specific recommendation, not just by one, not just by two, not just by three, but by six Cabinet members all joined together declaring that there is a need to suspend [the tax],” he said.
The bill says the president “may, upon the recommendation of the Development Budget Coordination Committee (DBCC), in coordination with the secretary of the Department of Energy (DOE), suspend the imposition of, or reduce the excise taxes on fuel” subject to conditions.
The DBCC is composed of the Department of Budget and Management; Department of Finance; Department of Economy, Planning, and Development; and Office of the President. The Bangko Sentral ng Pilipinas serves as adviser to the DBCC.
The conditions are when the average Dubai crude oil price based on the MOPS has reached or exceeded US$80 per barrel for a month “immediately preceding the issuance of the suspension or reduction order,” or the president has declared a state of national emergency or calamity, and such condition has resulted in extraordinary increases in domestic pump prices of petroleum products as certified by the DOE secretary.
Under the bill, the suspension may cover specific petroleum products. It allows full suspension or partial reduction of the excise tax rates. The suspension or reduction can only last for up to six months unless Congress extends it or ends it earlier through a joint resolution. The total suspension period shall not exceed a year.
The bill grants the president the power to temporarily suspend or cut fuel excise taxes until Dec. 31, 2028.
Leyte 1st District Rep. Martin Romualdez welcomed the approval of the substitute bill.
“An excise tax suspension or reduction will be a big relief to our people at this time of soaring fuel prices. A suspension would mean a retail price reduction of P6 to P10 per liter,” said Romualdez, whose House Bill (HB) 5779 was among the proposals consolidated by the substitute bill.
His proposal was to permanently remove the excise tax on fuel.
“That would have been the ideal measure, but I also understand the need for the government to continue relying on billions in excise tax collections for vital social services,” he said.
Bicol Saro Rep. Terry Ridon also welcomed the committee’s passage of the substitute bill.
“It ensures that government can immediately intervene when global crises threaten to drive up fuel prices and worsen the economic burden on ordinary Filipinos,” Ridon said.
Ako Bicol Rep. Jan Chan also welcomed the committee approval of the substitute bill.
“Amid oil price volatility in the world market, it is important that the government has a swift way to ease the additional burden borne by motorists and ordinary Filipinos,” Chan said in Filipino and English in a statement.
The substitute bill still has to go through plenary consideration.
