THE three-month suspension of excise taxes on kerosene and liquefied petroleum gas (LPG) cost the government some P2.5 billion in foregone revenues, Finance Secretary Frederick Go said on Thursday.
President Ferdinand Marcos Jr., through Executive Order (EO) 114, earlier this year halted the imposition of excise taxes on specific petroleum products to cushion the impact of elevated global oil prices on consumers and businesses.
The move cut LPG costs by P3.36 per kilogram and kerosene by P5.60 per liter.
The exemption was lifted on Wednesday after the Bureau of Internal Revenue said the Department of Energy had certified that the one-month Dubai average had fallen to $79.45 per barrel, below the $80-per-barrel threshold set under EO 114.
Excise tax rates on kerosene and LPG automatically reverted to those prescribed under Section 148 of the National Internal Revenue Code of 1997.
“[B]ased on the mechanics, based on the rules, the action to be taken by the Bureau of Customs and the Bureau of Internal Revenue is automatic by law,” Go told reporters.
Under the EO, the suspension would end once either of two conditions was met: Dubai crude falling below $80 per barrel or upon expiration of the three-month period, whichever came first.
Go, however, said another suspension or a lowering of excise taxes could be recommended if crude oil prices increase again.
“But that will still be subject to the approval of the president of the republic, because that’s how the law is written,” he added. “If it exceeds $80 per barrel, we may recommend it to the president.”
