BIR issues implementing guidelines for LPG, kerosene excise tax suspension

The Bureau of Internal Revenue (BIR) on Friday issued the implementing guidelines for the suspension of collection of excise taxes on liquefied petroleum gas (LPG) and kerosene.

The BIR’s Revenue Regulations No. 003-2026, implements President Ferdinand Marcos Jr.’s Executive Order No. 114 entitled “Temporarily Suspending the Excise Taxes on Specific Petroleum Products Pursuant to Section 148 of the National Internal Revenue Code of 1997, as Amended.”

The Revenue Regulations No. 003-2026 states that the imposition of excise taxes on LPG and kerosene is suspended beginning April 17, 2026.

The BIR issuance, however, provided that the suspension of excise tax does not cover LPG products when used as raw material for the production of petrochemical products or for motive power and kerosene when used as aviation fuel.

The duration of suspension of the covered petroleum products shall remain in effect for a period of three months, subject to monthly review by the Development Budget Coordination Committee (DBCC)—which shall recommend the directive’s continuation, modification, extension, or termination.

Moreover, the BIR’s issuance provided that the excise tax on LPG and kerosene shall automatically revert to its prescribed rates without the need for further issuances if any of the following factors were triggered:

• One week after the one-month average of Dubai crude oil price based on Mean of Platts Singapore (MOPS) falls below $80 per barrel 
• Upon expiration of the three-month suspension period

The guidelines also directed the BIR and the Bureau of Customs (BOC) to submit to Congress a monthly report on the declared value and volume of the covered petroleum products.

Marcos on April 13 announced the suspension of excise taxes on LPG and kerosene, a move aimed at easing the burden on households amid volatile global oil prices driven by tensions in the Middle East.

The authority stems from Republic Act No. 12316, signed on March 25, which grants the President emergency powers to suspend or reduce fuel excise taxes upon the recommendation of the Development Budget Coordination Committee (DBCC), in coordination with the Department of Energy (DOE).

The law took effect this month, or 15 days after its publication and allows the exercise of such powers until December 31, 2028.

Prior to the suspension, excise taxes under the Tax Reform for Acceleration and Inclusion (TRAIN) Law were set at P3.00 per kilogram for LPG and P5.00 per liter for kerosene.

With the suspension, the Department of Finance (DOF) said consumers may save around P36.96 per 11-kilogram LPG cylinder and P5.56 per liter of kerosene. —VAL, GMA News