DoF Mulls Further Cutting Tariff Rates on Petroleum from 3 to 1%
Byline: LEE C. CHIPONGIAN
To further cushion the impact of imposing the ten percent VAT on petroleum products the Department of Finance is thinking of reducing tariff rates from 3 percent to one, Secretary Margarito B. Teves said.
"(As a mitigating measure) we can further reduce tariff duty on petrol products from 3 to 2 percent, or to one percent," said Teves. "But I will not commit myself to any figure at the moment," he added.
The DoF chief said he would have to see how successful increased collection from the expanded VAT will be. "We donat know yet what the revenue picture will be. The question is if we can reduce (tariff on petroleum) more from 3 percent to possibly one percent."
Under Republic Act 9337 or the reformed VAT law a reduction in excise tax in kerosene, diesel and bunker fuel were included to temper the increase in pump prices. In addition, Executive Order 440 reduced the tariff rates on petroleum products from 5 percent to 3 percent to lessen the price impact.
According to Teves, "I am laying the ground works (for more mitigating measures). I am not saying we are going to do it, I am just identifying other possible ways (to help the public cope with the new VAT)." The new tax will take effect November 1.
The mitigating measures, which includes the removal of franchise tax on power distribution utilities, domestic airlines and common carriers tax and the increase in marginal threshold from P550, 000 to P1. …