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F

Excise Tax on Petroleum


Products in the Philippines

In his State of the Nation Address, President Rodrigo acts


Duterte vowed to introduce momentous tax reform
in
igures
measures that would significantly bring down the income
tax burden of the working population. Consequently,
the government is also looking for ways to offset the
effect of a lower personal income tax collection to the
total government revenue. One of the proposals is to Congressional Policy and Budget Research Department
increase the excise tax rates of all petroleum products. House of Representatives
January 2017 (No. 1)
Excise Tax Rate on Petroleum Products. Table 1
shows the existing specific tax rates on petroleum
products vis-a-vis the proposed new rates according these years as they were either aggregated to another
to the DOF-proposed tax reform measure that was type or they had no entries at all.
submitted to Congress. It can be noted that the new rates
will be P4.65 to P6.50 higher than the existing rates. Table 2
The last time that these excise tax rates were amended Volume of Removals, 2013-2015
was when Congress enacted RA 9337 in 2005, which (In Millions)
imposed zero (P0.00) tax rates on kerosene and diesel Product/s 2013 2014 2015
fuel.
Premium gasoline (L) 946.0 923.47 942.87
Table 1
Excise Tax Rate on Petroleum Products Unleaded gasoline (L) 866.97 973.94 1,610.23
(In Pesos per Liter or Kilogram) Regular gasoline (L) - - -
Kerosene (L) 106.97 86.55 81.37
Particulars Existing Proposed
*Diesel (L) 3,671.03 4,040.43 5,074.92
Lubricating oils and greases (L) 4.50 10.00 Avturbo (L) 132.53 295.65 194.98
Processed gas (L or kg) 0.05 6.00 Asphalts (kg) 0.49 0.24 0.12
Waxes and petrolatum (kg) 3.50 10.00 Processed Gas - - -
Denatured alcohol (L) 0.05 6.00 *Bunker fuel oils (L) 1,868.91 2,060.30 1,066.24
Naptha, regular gasoline, and other Lube oil (L) - - -
4.35 10.00
similar products of distillation (L)
Leaded premium gasoline (L) 5.35 10.00 Waxes (kg) - - -
4.35 10.00 *Exempt products or zero-rated excise tax pursuant to RA No. 9337
Unleaded premium gasoline (L)
Sources of basic data: BIR
Aviation turbo jet fuel (L) 3.67 10.00
Kerosene (L) 0.00 6.00
Diesel fuel oil and similar fuel oils Volume of Imports. On the other hand, it is the Bureau
having more or less the same 0.00 6.00 of Customs (BOC), the primary collector of excise tax on
generating power (L)
imported goods, that manages the entry and disposition
Liquefied petroleum gas (L) 0.00 6.00
Asphalts (kg) 0.56 6.00 of imported petroleum products in the country. Table 3
Bunker fuel oil and similar fuel oils shows the volume of imports of petroleum products from
having more or less the same 0.00 6.00 2013 to 2015 as recorded by BOC. Also, according to
generating power (L)
BOC, there has been a change in their recording system
Sources of basic data: NIRC, DOF Tax Reform Package
wherein the volume of premium and regular gasoline
Volume of Removals. Table 2 shows the volume are now aggregated under motor spirit, starting 2015.
of removals (in liters and kilograms) of the different
petroleum products for 2013 to 2015. The statistics from The volume of both removals and imports reflects the
the Bureau of Internal Revenue (BIR), the sole revenue varying annual supply and demand of these products.
collecting agency for goods manufactured or produced For both locally-manufactured/produced and imported
in the Philippines for domestic sale or consumption goods, it is the gasoline, diesel, and fuel oil which form
or for any other disposition, did not include entries for part of the bulk (more than half) of the total volume of
regular gasoline, processed gas, lube oil, and waxes for petroleum products traded.
Table 3 For BOC, total collection declined by 3.04% from 2013
Volume of Imports, 2013-2015 (P14,195.32 million) to 2014 (P13,763.47 million). In
(In Millions)
2015, total collection declined by 4.39% y-o-y to about
Product/s 2013 2014 2015 P13,158.93 million.

Premium (L) 1,499.04 1,136.46 -


Table 4 lists the annual Organization of Petroleum
Regular (L) 732.22 745.55 -
Exporting Countries (OPEC) Basket Price or the
Motor spirit (L) - - 1,807.19
weighted average of prices for petroleum blends
Aviation Gas (L) 946.97 725.61 667.20
produced by OPEC members starting from 2006 up to
Diesel (L) 4,222.28 4,985.98 4,747.50
2015. It also lists the corresponding annual peso-dollar
Kerosene (L) 53.11 69.54 43.08
exchange rate for the past 10 years for reference.
Fuel Oil (L) 493.88 877.86 1,259.83
LPG (L) 146.64 634.82 848.62 Table 4
OPEC Reference Basket
Lubricating Oil (L) 233.82 287.70 490.40
2006-2015
Others 164.12 9,725.39 710.68
OPEC Basket Price Peso Exchange Rate
Sources of basic data: BOC Year
(Per Barrel, US$) (Per Dollar)

2015 49.49 45.5028


Excise Tax Collection from Petroleum Products.
2014 96.29 44.3952
Figure 1 represents the total excise tax collection from 2013 105.87 42.4462
petroleum products of both the BIR and BOC from 2013 2012 109.45 42.2288
to 2015. For BIR, the total excise tax collection from 2011 107.46 43.3131
petroleum products for 2013 is at around P8,373.06 2010 77.45 45.1097
million. Total year-on-year (y-o-y) collection grew 2009 61.06 47.6372

11.54% for 2014 and 26.57% for 2015, when it reached 2008 94.45 44.4746
2007 69.08 46.1484
as much as P11,820.75 million.
2006 61.08 51.3143
Figure 1 Sources of basic data: OPEC, BSP
Excise Tax Collection from Petroleum Products
(In Million Pesos) Table 5 shows the projected tax rates of selected
16000 petroleum products if they are to be indexed to headline
14000 inflation and inflation based on a major commodity
12000 group to which they belong (housing, water, electricity,
10000 2013
gas and other fuels). The base year, 1998, was the year
8000 2014 that the National Internal Revenue Code of 1997 took
6000 2015 effect. The projections showed that by 2015, the tax
4000
rates for these selected products are more or less close
2000
to the proposed tax rates, except for products that are
0
exempt/zero-rated (under RA 9337) such as kerosene,
BIR BOC
diesel fuel, and LPG.
Sources of basic data: BIR, BOC
Table 5
Indexed Tax Rate of Selected Petroleum Products
(In Pesos per Liter or Kilogram, Selected Fiscal Years)
1998 Proposed
Particulars 2002 2006 2011 2015
(Base Year) Rates

CPI (2006=100) 67.8 83.0 100 126.1 141.5


CPI (Elec., gas, fuels, etc.) 63.7 81.5 100 120.3 129.1
Inflation (Headline) 9.4 2.7 5.5 4.6 1.4
Inflation (Elec., gas, fuels, etc.) 9.3 3.8 5.9 5.2 (1.3)
Lubricating oils and greases (L) 4.50 5.51 5.76 6.64 7.06 8.37 8.50 9.39 9.12 10.00
Waxes and petrolatum (kg) 3.50 4.25 4.48 5.16 5.49 6.51 6.61 7.30 7.09 10.00
Leaded premium gasoline (L) 5.35 6.55 6.84 7.89 8.40 9.95 10.10 11.17 10.84 10.00
Unleaded premium gasoline (L) 4.35 5.33 5.57 6.42 6.83 8.09 8.22 9.08 8.82 10.00
Aviation turbo jet fuel (L) 3.67 4.49 4.70 5.41 5.76 6.83 6.93 7.66 7.44 10.00
Kerosene (L)* 0.60 0.73 0.77 0.00 0.00 0.00 0.00 0.00 0.00 6.00
Diesel fuel (L)* 1.63 2.00 2.09 0.00 0.00 0.00 0.00 0.00 0.00 6.00
*RA 9337 imposed zero (P 0.00) tax rates on kerosene and diesel fuel starting 2006.
Source of basic data: Philippine Statistics Authority

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