Senate Bill No. 1798: 'Bawas Presyo Bill' Wants to Suspend Excise Tax on Fuel

Everyone can feel the effects of the Tax Reform for Acceleration and Inclusion (TRAIN) Law's excise taxes these days--and this includes fuel prices. The good news is that Sen. Paolo Benigno Aquino IV has filed Senate Bill No. 1798, or the Bawas Presyo Bill, to automatically suspend the excise tax on fuel.

According to the bill, the Bawas Presyo Act is a means to "protect underprivileged Filipino families from increasing fuel prices, and its effect on the prices of goods and services, by suspending the excise tax on fuel under TRAIN when the average inflation rate surpasses the annual inflation target range over a three-month period."

However, in the event that the inflation rate stabilizes and falls below the yearly three-consecutive months target, then the Department of Finance (DOF) can decide whether or not to lift the suspension and "reimpose the excise tax on fuel."

Once this law is passed, then it will halt the scheduled PHP2 additional excise tax that will be imposed on petroleum products next year under the TRAIN 2 Law.

TRAIN 2: The Second Phase

The House of Representatives recently approved the third and final reading of the House Bill 8083, which is also know as the TRAIN Law 2. Now renamed  Tax Reform for Attracting Better and High-quality Opportunities (TRABAHO) bill, it will be the "second package" of the Comprehensive Tax Reform Program that will help fund the numerous 'Build, Build, Build' projects of President Rodrigo Duterte.

The TRABAHO Bill plans, which will be extensively studied and discussed in the Senate, aims to enhance investments by lowering the corporate income tax rate from 30 percent to 20 percent. There are also plans to impose higher taxes on business process outsourcing firms, to enable businesses that earn foreign exchange lesser incentives. Consequently, this will further boost the country's economy.

According to Senator Ralph Recto, the "second wave" of TRAIN 2 may be inflationary due to the tax increase on domestic industries, specifically petroleum, housing, and power.