By Ruth Abbey Gita-Carlos | Philippine News Agency
The Department of Energy (DOE) said Friday a new law must be enacted to remove the value-added tax (VAT) on petroleum products.
Speaking to Palace reporters, Energy Secretary Sharon Garin explained that the VAT on fuel is imposed under the National Internal Revenue Code (NIRC), a legislation passed by Congress.
Garin said any move to eliminate the VAT on petroleum products would require an amendment to the NIRC.
“Is it possible to eliminate the VAT? The VAT is imposed under the Revenue Code, which was under Congress. It’s a legislation,” she said.
“This was an imposition by legislation, and it’s an imposition that can only be removed through legislation also.”
Garin said any measure must go through Congress, as mandated by existing tax laws.
She, however, cautioned that removing the VAT on fuel could result in significant revenue losses for the government.
She said the actual revenue impact may vary, depending on global oil prices and the design of the proposed policy, including whether the VAT removal would cover the entire supply chain or only apply to pump prices.
“I’m not from the Department of Finance, but I think the estimate was about P170 billion per year ang VAT on petroleum products. So, that’s P170 billion also na mawawala sa collection,” she said.
Garin, nevertheless, assured the public that gas stations and oil firms are strictly being monitored to prevent profiteering and hoarding amid oil supply disruptions stemming from tensions in the Middle East.
The DOE has already issued several directives in line with President Ferdinand R. Marcos Jr.’s Executive Order 110 to ensure compliance among stakeholders and protect consumers.
Among these are the Special Operating Guidelines for Fuel Retail Monitoring and Inspection by deputized agencies to ensure orderly and coordinated field inspections to maintain fuel quality, fair prices, and uninterrupted fuel distributions, and Anti-Hoarding measures to protect fuel supply and Filipino consumers.
Garin said cases of profiteering and hoarding have declined with the help of the Philippine National Police, noting a “more stable supply” in gas stations.
She added that oil companies are submitting weekly reports to the agency detailing their price adjustments and the reasons behind them.
