The Department of Finance (DOF) cautioned that a complete suspension of excise taxes on all fuel products would result in approximately ₱43.6 billion in lost government revenues over a three-month period.
Finance Undersecretary Karlo Fermin Adriano made the disclosure during a press briefing on Tuesday.
“If you decide to include a suspension of diesel and gasoline, and LPG (liquefied petroleum gas) and kerosene on top, it will be around ₱43.6 billion losses in 3 months,” Adriano said.
He explained that suspending excise taxes on LPG and kerosene alone would lead to about ₱4.1 billion in foregone revenue during the same period.
The remarks followed President Ferdinand Marcos Jr.’s announcement of the suspension of excise taxes on LPG and kerosene. The measure is expected to lower the price of an 11-kilogram LPG tank by ₱37 and kerosene by ₱5.60 per liter.
The temporary tax relief is being implemented under Republic Act No. 12316, which authorizes the President to suspend or reduce fuel excise taxes for a maximum of three months.
Adriano also pointed out that the revenue losses from a full suspension would far outweigh any additional collections from value-added tax (VAT) that might result from increased fuel consumption.
“And your additional VAT collection will be around ₱13 to ₱14 billion, and hence, there’s a net negative revenue loss of around ₱30 billion,” he said.