Suspending fuel excise tax 'detrimental' to economy: DOF

MANILA - The proposed suspension of excise taxes on fuel to cushion the impact of rising gas prices is inequitable and detrimental to the country's economic recovery, the Department of Finance said Monday.

Suspending only the fuel excise taxes and VAT under the Tax Reform for Acceleration and Inclusion law, meanwhile, could lead to a P119.5 billion or around 0.5 percent of GDP in the same, year, DOF estimates showed.Several consumers, transport groups as well as some lawmakers have called for the suspension of fuel excise tax after the prices of petroleum products rose for several consecutive weeks.

Beltran also added that higher-income households were poised to benefit 60 percent more from the suspension instead of lower income households. “With the suspension of fuel excise taxes, we will lose the improvements we made under TRAIN in making the tax system more equitable, in which those who are more financially capable pay more taxes,” Beltran said.The government earlier said it would release P1 billion to fund cash grants for some 178,000 public utility drivers.

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