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DBM: Fuel excise tax suspension will have an impact on funding for social services

The Department of Budget and Management (DBM) on Wednesday rejected proposals to suspend the collection of excise taxes on petroleum products, warning that doing so would be counterproductive.

At the Laging Handa briefing, DBM officer-in-charge Tina Rose Canda said that while suspending the excise tax on fuel would benefit the transportation and agriculture sectors, this would hit “other social services.”

“Education mawawalan ng pondo para sa K-12... Ang DOH [Department of Health] maapektuhan ang kanilang health facilities plus ‘yung kanilang assistance for individuals in crisis [situations] tapos medical assistance. Ang DSWD [Department of Social Welfare and Development] ang matatamaan sa kanila ‘yung assistance for regions in crisis situations,” Canda said.

(Education may lose funds for K-12… The DOH’s budget for health facilities plus their assistance for individuals in crisis situations as well as medical assistance would be affected. For the DSWD, what would be affected is their assistance for regions in crisis situations.)

Several lawmakers have expressed support for the suspension of excise taxes on fuel products as an immediate relief amid the continuous rise in oil prices aggravated by the Ukraine-Russia war.

The Department of Finance (DOF) has bucked calls for the suspension of excise taxes on petroleum products as this may result in a revenue loss amounting to P131.4 billion for 2022 alone, which may affect the government’s budget for COVID-19 recovery measures. 

“‘Yun ‘yung mangyayari. Matutuwa ang isang sektor pero siguro mga tatlo o apat na sektor naman ang hindi mapopondohan sa pagtanggal ng excise tax,” Canda said.

(That’s what will happen. One sector will benefit, but three or four sectors won’t be funded if you remove the excise tax.) — VBL, GMA News