Casiño calls for lower VAT, subsidies for LPG and diesel

With oil companies again hiking LPG prices big time, party list representative Teddy Casiño (Bayan Muna) once again called on the government to mitigate the price shock by reducing the value added tax on oil from 12% to 6% or use the Malamapaya funds to subsidize LPG and diesel.

Oil companies Petron and Total imposed a P6 per kilogram (VAT exclusive) increase in LPG prices yesterday. Other oil companies are scheduled to hike their prices today.

"In many countries like the United Kingdom they charge a lower VAT on electricity and oil for household use. This is a form of indirect subsidy that we can very well adopt in the Philippines, instead of a uniform 12% VAT on all products," said Casiño.

"In the last hearing of the budget of the Department of Energy, Secretary Rene Almendras admitted that our neighbors in Asia as well as other countries normally subsidize their energy and oil sectors just to keep prices low. If they do it, why shouldn't we?" said the lawmaker.

Other than an indirect subsidy, he said government can also use the more than P43 billion that the government profited for 2011 from the Malampaya funds for direct subsidies for LPG and diesel products.

"Kailangan talagang tutukan na ng gobyerno ang mga pagtaas na ito at pumasok na sa pagbibigay ng subsidiya dahil di na kakayanin ng mamamayan ang dagdag. We have been imposing a 12% VAT on oil and petroleum products since 2005 and its time we give our people a break," he stressed.

He called on the House leadership to immediately take up his House Bill 6416 which aims to reduce VAT to 6 percent for electricity, water services and oil and petroleum products in order to provide immediate relief to consumers and the domestic economy. 

The 50% cut in the VAT rate will bring down prices of oil products by at least three (3) pesos per liter, electricity rates by at least 38 centavos per kilowatt hour (kWh) for lifeline electricity users.