The word flip-flop could also mean “a sudden reversal of a policy or strategy according to the Merriam-Webster dictionary.

In the news, it is this flip-flop of the latter kind that we’ve been seeing lately, specifically concerning the scheduled increase in excise taxes on fuel, to take effect on Jan. 1, 2019. Note that the “Tax Reform for Acceleration and Inclusion” (Train) Law imposed new excise taxes on gasoline, diesel, liquefied petroleum gas, kerosene and bunker fuel, among others. Particularly, the Train Law imposed an excise tax on unleaded gasoline of P7/liter and P2.50/liter for diesel, effective Jan. 1, 2018. These excise taxes on fuel are scheduled to be increased by P2/liter, effective Jan. 1, 2019.

Several months ago, amid skyrocketing prices of goods and commodities, talk was rife about the possible suspension of the P2/liter scheduled increase. Revenue Regulations (RR) 2-2018, which implements the excise tax provision on fuel under the Train Law, provides that the scheduled increase shall be suspended when the average price of Dubai crude oil reaches or exceeds $80/barrel for three months prior to the scheduled increase of the month.

At that point in time, the possibility of a suspension was certain, even if the world price for crude oil had fallen below $80/barrel. No less than Finance Secretary Carlos Dominguez 3rd went on to assure the public that “the suspension of the scheduled increase in excise taxes on fuel next year will still push through even if the trigger price of $80 per barrel will not be met”.

And we were happy with that. Never mind the fact that what is to be suspended is just the P2 increase in excise taxes; or that the DoF may re-instate the P2 excise tax if the average price of Dubai crude oil falls below the $80/barrel threshold for January to March of 2019.

And now we see the Duterte administration, changing its mind, yet again, on this crucial policy issue. When asked to comment, Budget Secretary Benjamin Diokno explained that the reasons for the reinstatement of the excise tax increase focused on the sharp turnaround in world crude prices. Diokno explained that by January 2019, the fuel pump prices of gasoline (95 Octane) and diesel are projected to be as low as P50.82/liter and P37.76/liter, respectively, inclusive of the tax hike. He also reasoned that a suspension would result to a considerable amount of revenue loss for the government, estimated at P43.4 billion.

This makes you think about this administration’s sincerity in floating the idea of a suspension in the first place. For one thing, the promise of a suspension, no matter how measly, was effective in quelling public outrage caused by the steady rise in prices of basic goods and commodities.

At this point, I am reminded of a famous song by Regine Velaquez, which goes: “Urong-sulong ka, bakit ka ganyan?”

Manila Times Source

ATTY. PEACHES ARANAS

Managing Partner LMA LAW