MANILA, Philippines – Listed oil firm Phoenix Petroleum Philippines Incorporated told the finance department of its plans to pay in advance its taxes due for its gasoline and petroleum-based product sales in 2017, as a gesture of support for the administration's proposed tax reform package, which includes higher excise taxes.
"We paved a pathway that allows us to help the government without having to raise prices for consumers, or risk the return on investment for our shareholders. This is a win-win situation, and the benefits will be felt by all," Dennis Uy, president and chief executive officer (CEO) of Phoenix Petroleum, was quoted as saying in a statement issued by the Department of Finance (DOF) on Sunday, March 26.
This marks the first time any oil company has volunteered to pay its taxes in advance to show support for a government program.
The government's planned Comprehensive Tax Reform Program (CTRP) will raise excise tax on gasoline to P10 per liter from the current P4.35, and impose an excise tax of P6 per liter on diesel, which currently has no excise tax.
Bangko Sentral ng Pilipinas Deputy Governor Diwa Guinigundo on Thursday, March 23, said that the central bank assumes Congress will pass the tax reform package in the 4th quarter of the year.
"I think the plan for the excise tax is to stagger it so the impact on consumer prices will be gradual," Guinigundo told reporters.
Uy also emphasized the sustainability of the pre-payment process. (READ: Why PH has 2nd highest income tax in ASEAN)
"At Phoenix Petroleum, we have found the flexibility and creativity to pre-pay taxes while at the same time protecting the interests of all stakeholders," he said.
Phoenix Petroleum is the first independent oil company to be listed on the Philippine Stock Exchange (PSE) after the Oil Deregulation Law was passed in 1998.
The DOF had said the tax reform program is anchored on record spending on infrastructure, human capital, and social protection for the poor in order to reduce the poverty rate from the current 21% to 14% by 2022 and to transform the Philippines into an upper middle-income economy.
The first package of the CTRP is contained in House Bill No. 4774, which seeks to cut personal income tax rates as a way to put more money in the pockets of low- and middle-income taxpayers and to offset the projected revenue loss with compensatory measures such as broadening the value-added tax (VAT) base and adjusting the excise taxes on automobiles and petroleum products.
Complementing such policy changes are tax administration reforms to reduce corruption and improve the collection efficiency of the Bureau of Internal Revenue (BIR) and Bureau of Customs (BOC). – Rappler.com