DOF exec: Gov’t to lose P6.9B in revenue if excise tax suspended for 3 months

The government will incur P6.9 billion in foregone revenue if the suspension of excise taxes under the tax reform program will be implemented for three months, a Finance official said Wednesday.

Finance Undersecretary Karl Kendrick Chua added that if the suspension will be implemented for a whole year in 2019, the government will lose an even bigger P41.6 billion. However, because of higher oil prices, the government may collect more from the value added tax (VAT).

“Around P14 billion is the latest estimate (of VAT that will be collected) but it really depends on the exchange rate, Dubai price. So if that happens, we are looking at P41.6 billion minus P14 billion, around P27.6 billion loss to the budget,” Chua explained.

Senator Sherwin Gatchalian then asked how much would be the revenue loss if the suspension will only be for three months as mentioned by Chua earlier in the hearing.

Chua replied P6.9 billion, after making computations.

“Because the net is around P27.6 billion then one quarter would be P6.9 billion, it will depend on the price of oil. It could be higher or lower, the higher collection from the VAT really depends on the price,” he said.

He added that to preserve the deficit target, a task force has been created by the economic managers to determine which are the unnecessary spending or those that can be postponed and not urgent.

Budget Assistant Secretary Rolando Toledo said among the expenditures that will be reduced are motor vehicle purchases, conduct of trainings, and travels.

Gatchalian asked if Lakbay Aral will be affected, Toledo replied in the affirmative.

“Actually that is one consideration, tignan namin yung mga trainings, travels, we have to consider that also in cutting the expenditures. Motor vehicle most probably, bagong sasakyan, travels, trainings, those are the top three that will be affected,” Toledo said.

He added the Development Budget Coordination Committee will meet on October 31 to discuss the details of the cutting of expenditures. — MDM, GMA News