Independent oil producers expressed their support to revert back to the specific tax system
The country's independent oil producers yesterday expressed their support to move in the Lower House to revert back to the specific tax system so consumers would not be unjustifiably burdened every time there is an upsurge in oil prices.
The Independent Philippine Petroleum Companies Association (IPPCA) said the imposition of the 12 percent Value Added Tax (VAT) has become "too burdensome" given the present economic condition as well as the volatility in the world oil market.
Earlier, Antique Representative Exequiel B. Javier authored a bill calling for the imposition of the specific tax system, under which the proposed tax for diesel products shall be fixed at P2.50 to P3.00 per liter; while gasoline products shall be slapped with a gigantic tax of P12 per liter.
The lawmaker justified the lower VAT for diesel, as it is the fuel used by most public transport groups, primarily jeepneys and buses.
Under the current EVAT Law, diesel is taxed by more than P6.00 per liter; while gasoline is imposed both VAT and specific tax of P4.35 per liter, running to a total of about P11 per liter.
Javier also noted that with VAT, the projected collection of government was at P73 billion at crude reference price of $ 70 per barrel.
When prices climbed to $ 100 per barrel, the VAT revenues were estimated to inch up also to as high as P91 billion this year.
In a letter sent to Javier, IPPCA suggested, "the specific tax system be the one to be used as the vehicle in generating new revenues to replace the VAT."
IPPCA also indicated that it is ready to present facts and figures to help justify the shift to specific tax system to "prove its superiority in terms of reliability as revenue source, fairness to big and small oil distributors and the consuming public, its insulation from abuse and the efficiency of its administration.
It added that the specific tax system also allows structuring of prices of petroleum products to make it more socially acceptable
IPPCA includes Seaoil Philippines Incorporated, Flying V, Eastern Petroleum Corporation Castrol, Filpride, Liquigaz, Chemrez, Oilink, Filoil, Chemfour, IEPI, Senbel and Unioil Petroleum Philippines Inc.
The group has earlier decided to hold off any price increase due to the decline in world oil prices.
According to the DOE, the regional benchmark Dubai crude registered a July average of $133.91 per barrel from the $127.82 a barrel in June.
This average was lower than the $137 a barrel posted as of end last week.