a temporary suspension of the fuel excise tax and the elimination of many lines of the value-added tax exemption (VAT).
This two-pronged approach, according to Sen. Panfilo “Ping” M. Lacson, can give Filipinos much-needed breathing room from the effects of exorbitant fuel costs.
“When oil prices on the international market reach a predetermined level, such as $90 or even $100 per barrel, we can temporarily suspend excise duties on fuel.
This could give the transportation industry and others suffering from high fuel costs some breathing room “In a Sunday evening media interview, Lacson stated.
On the other hand, he asserted that the Philippines is the only nation in Southeast Asia with more than 100 lines of exemption and that the government should reduce those lines.
Even with a VAT rate reduction from 12 to 10 percent, he said that by eliminating 78 lines of exemptions from certain industries like the electricity sector, cooperatives, housing, and economic zones, “we could have generated at least P117 billion in additional tax revenues in 2018 alone.”
“The VAT exemptions have long been in place. Reviewing these exemption lines and reducing the overall number of exemptions is long overdue “Added he.
According to Lacson, this would be preferable than plans to provide subsidies to low- and middle-income households, which might put a pressure on the budget.
He pointed out that a sizable portion of the budget is already allocated to social welfare initiatives like the 4Ps and grants for small, medium, and agricultural businesses.
“Baka hindi kayanin ng budget (The budget may not be enough for these),” he said.