Farmers reiterate call for VAT removal on oil products

‘Mabuti pa ang mga turista’–KMP

On the eve of another round of increases in prices of petroleum products, the Kilusang Magbubukid ng Pilipinas (KMP) reiterated its demand for the removal of value added taxes (VAT) on diesel, gasoline, kerosene and cooking gas.

Reacting to the government’s announcement that President Ferdinand Marcos Jr. has approved VAT reimbursements to foreign tourists, the farmer’s group said the government should first provide relief to low-income families.

“Unahin muna dapat ng gobyerno na tugunan ang panawagan ng publiko na alisin na ang VAT sa langis para bumaba ang presyo ng mga produktong petrolyo. Pero ang ginawang prayoridad ng Pangulo ay bigyan ng VAT refund ang mga turistang papasok sa bansa,” KMP chairperson Danilo Ramos said.

(The government should first approve demands to remove the VAT on oil in order for prices to go down on petroleum products. But the president instead prioritized VAT refunds for foreign tourists.)

Based on the Department of Energy’s price monitoring, the net increase so far this year is ₱5.90 per liter for gasoline, ₱2.05/L for diesel, and ₱3.20/L for kerosene.

Estimates show that gasoline prices will increase tomorrow by ₱1.30/L, Diesel by ₱1.00/L, and Kerosene by ₱1.35/L.

A big-time price increase on LPG is also expected starting in February or as much as ₱9.50 per kilogram or ₱104.50 per LPG cylinder, the KMP revealed.

KMP’s Ramos added that government’s VAT Refund Program for foreign tourists is part of Quick Wins recommendations from the Private Sector Advisory Council that were approved by Marcos Jr.

“This shows the President’s unending favor to private companies and the private sector over public interest,” Ramos added.

Poor Filipinos first

KMP said scrapping the oil excise taxes under the Tax Reform for Acceleration and Inclusion Law will provide immediate relief to Filipinos and help control the rising inflation.

Removing the excise tax and VAT on oil will remove P6 per liter from diesel, P5.35 per liter for unleaded gasoline, and P3 per kilogram of LPG, the group said.

Oil revenue losses can be offset by also suspending the corporate income tax cuts under the Corporate Recovery and Tax Incentives for Enterprises Law.

“Reducing indirect consumption taxes such as on oil and increasing direct taxes on income makes the tax system more progressive,” the KMP said.

The farmers’ group said Filipinos are still reeling from the damaging effects of frequent oil price hikes in 2022.

Oil prices hiked for 11 consecutive weeks in January to March of last year.

The net year-to-date price increase in 2022 was at ₱14.90/L for gasoline, ₱27.30/L for diesel, and ₱21.30/L for kerosene. # (Raymund B. Villanueva)