Clean Air Asia backs DOF tax reforms

Date Posted : March 21, 2017

Clean Air Asia backs DOF tax reforms

Date Posted : March 21, 2017

An international nongovernment organization advocating clean air initiatives is backing the Department of Finance (DOF)-proposed reforms in excise taxes on fuel and vehicles as an effective measure to raise additional revenues while curbing air pollution by reducing the “wasteful consumption” of fossil fuels.

Clean Air Asia also lauded the Philippine government’s plan to use part of the higher collections from the would-be adjustments in taxes on petroleum products and automobiles to implement projects that would promote the efficiency and sustainability of the country’s transportation sector.

It said the DOF’s proposed excise tax reforms “can contribute towards potentially reducing wasteful consumption of fossil fuels in the transport sector, alleviating rapid motorization by utilizing part of the revenues for projects that improve the efficiency of the transport systems in the country, and internalizing associated environmental and health costs, such as those from air pollution.”

“We support the utilization of a significant portion of the revenues from the fuel excise tax reforms to fund transport-related projects. We highly encourage the Philippine Government to instate a mechanism that would ensure that the revenues will be used for projects that promote efficiency and sustainability in the transportation sector, such as low emissions public transportation projects,” Clean Air Asia said in a statement of support signed by its executive director Bjarne Pedersen.

This organization noted that road vehicles are often key sources of air pollutants that affect human health and account for a hefty quarter of the energy-related greenhouse gases emissions in the country.

“The emissions inventory for the National Capital Region (2012) conducted by the Environment Management Bureau (EMB), for example, estimates that mobile sources account for 90 percent of the aggregated discharged amounts of air pollutants in the region,” Clean Air Asia said.

Clean Air Asia likewise pointed out that traffic congestion, which leads to wasted fuel and lost time, results in massive economic losses. “In 2015, the National Economic Development Authority (NEDA) estimated that the country is losing P3 billion per day due to traffic congestion,” it said.

Also in its statement of support, Clean Air Asia welcomed “the efforts to revise the automobile excise taxation schemes.”

“Again, we welcome the Government’s work to reform taxation initiatives and we believe they have the potential to contribute towards improving the welfare of the Filipino people…We look forward to more progressive policies that would further contribute towards sustainable transport, better air quality, and better citizen welfare,” it added.

The proposed excise tax reforms being pushed by the DOF are outlined in House Bill No. 4774, which was introduced by Rep. Dakila Carlo Cua.

Cua chairs the House Committee on Ways and Means, which has held over a half-dozen hearings on HB 4774 that aims to lower personal income tax rates as well as donor and estate taxes and offset the projected revenue loss by adjusting excise taxes on fuel and automobiles and expanding the VAT base but retaining exemptions for seniors and persons with disabilities.

In one of the House committee hearings, various groups supported the proposal by Cua and the DOF to adopt a fuel marking and monitoring system as a way to prevent oil smuggling and complement efforts at improving the collection of fuel excise taxes.

Officials of Dow Chemical, SICPA-Global Fluids International (SICPA-GFI), Authentix and United Color Manufacturing Inc. were one in saying that a fuel marking system is an “economic, commercial, health, safety and environmental” concern that should be institutionalized by the government to complement its proposal to adjust fuel excise tax rates as part of its Comprehensive Tax Reform Program (CTRP).

Fuel marking, which securely and covertly authenticates petroleum products, will help the government in foiling oil smuggling, which, according to industry data, has led to foregone revenues amounting to some $20 billion to $30 billion annually.


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Date Posted March 21, 2017

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