An excise tax is a legislated tax on specific goods or services at purchase, such as fuel, tobacco, and alcohol. “Taxes are the lifeblood of the government and their prompt and certain availability is an imperious need.”
The phrase expresses the underlying basis of taxation which is governmental necessity, for indeed, without taxation, a government can neither exist nor endure.
Taxation is a principal attribute of sovereignty. Paying taxes is commonly accepted as a necessary sacrifice for meeting government’s revenue needs
The present government under President Duterte passed a sweeping tax reform law, known as TRAIN (Tax Reform for Acceleration and Inclusion) which took effect on Jan. 1, 2018, requiring an excise tax of ₱6 per liter of diesel, ₱10 per liter of gas, ₱5 per liter of kerosene, and ₱3 per kilo of LPG.
This resulted in inflationary effects of higher petroleum prices that are seen to mostly affect the bottom 60 percent of households, since excise taxes on sugar-sweetened drinks will burden the bottom sectors, particularly those who are already tax-exempt under the current taxation system, higher property taxes due to higher property valuation, VAT on low-rental housing lead to higher rental costs, small businesses like sari-sari stores being taxed on gross income rather than net income (computed after expenses)pay higher tax.
The impact of increased world prices on fuel prices due to the Ukraine-Russia conflict, has resulted in complaints regarding high prices in basic goods, commodities, and services.
Recently, voters demanded that public services have grown, especially in the health sector, however, their dislike of taxes has not diminished; voters want more public services but they are unwilling to pay the full price for them.
Politicians unable to both increase the provision of public services and hold the tax rates steady may be replaced in an upcoming election.
If a politician is to remain in office then, he must increase the provision of public goods and services, without subjecting his constituents to excessive taxation.
In other words, the politician must find ways to reduce the tax burden of the voting public.
The Ways and Means Committee of the House of Representatives led by Chairman Albay Rep. Joey Salceda has approved a bill seeking to suspend and reduce excise taxes on petroleum products amid soaring global oil prices.
The measure aims to suspend excise taxes on diesel, kerosene, and liquefied petroleum gas for six months.
It also seeks to reduce tax on low-octane gasoline used primarily by tricycle drivers, but it will retain tax on premium gasoline, rates will be reverted back to prevailing levels once global price of oil normalizes or goes back to $65 per barrel, should the imposition of excise taxes be suspended for six months, the government will lose ₱45 billion.
Meanwhile, Sen. Grace Poe recently filed Senate Bill No. 2445 that seeks automatic suspension of excise taxes on regular gasoline, unleaded premium gasoline, and diesel. It will amend Section 148 of the National Internal Revenue Code. Now you know.
Let us vote wisely!
__________________________________
Author’s email: [email protected]
