Republic ofthe Pjlippines
House of Representatines
Quezon City, Metro Mails

Nineteenth Congress
Third Regular Session

HOUSE BILL NO.11363

Introduced by Representative Ferdinand Martin G. Romualdez,
Aurelio “Dong” D. Gonzales, Jr., Manuel Jose “Mannix” M. Dalipe,
Yedda Marie K. Romualdez and Jude A. Acidre

EXPLANATORY NOTE

This bill seeks to remove the excise tax on fuels, thereby amending
Republic Act (RA) No. 10963, otherwise known as the “Tax Reform for
Acceleration and Inclusion (TRAIN) Law.”

RA 10963 was signed into law on December 19, 2017 as one of the
components of the Comprehensive Tax Reform Program during the
administration of former President Rodrigo R. Duterte. The TRAIN law was
aimed at making the Philippine tax system simpler, fairer, and more efficient.
The main objectives of the TRAIN law are the generation of sustainable revenues
that will support government projects, public investments, and social services,
creation of jobs, and ultimately, eradication of extreme poverty.

Section 43 of RA 10963 amended Section 148 of the National Internal
Revenue Code, as amended, and provided in three tranches from January 1, 2018
to January 1, 2020 the excise tax rates on petroleum products such as lubricating
oils and greases; processed gas; waxes and petroleum; denatured alcohol to be
used for motive power; naphtha, regular gasoline, pyrolysis gasoline and similar
products used as raw material in the production of petrochemical products;
unleaded premium gasoline; aviation turbo jet fuel, aviation gas; kerosene, diesel
fuel oil; liquefied petroleum gas; asphalts; bunker fuel oil; and petroleum coke.


At the beginning of the implementation of the TRAIN law, the effect of the
lowering of individual income tax rates, as provided under Section 24 (A) (2),
had translated to the increase of the disposable income and purchasing power of
salaried Filipinos.

However, the negative and undesirable effects of the same law outweighed
the workers’ enjoyment of the increased disposable income. The excise tax for
petroleum products provided under Section 43 of RA 10963 did not just result in
the higher prices of fuels and other petroleum products, but also brought about
the escalation of the prices of goods and services which heavily rely on fuels for
its production, operation, or distribution.

Thus, instead of the potential savings that could have been realized by
salaried workers from the lowering of the personal income tax rates, the increase
in the disposable income just go down the drain as buffer for the elevated
household costs of food, utilities, transportation expenses, and other basic needs.
Further, the disposable incomes of minimum wage eamers and workers in the
informal sector who, in the first place, are not covered by the TRAIN law’s
lowering of the individual income tax rates, are, all the more, becoming
insufficient and severely depleted.

Aggravated by the tailing effect of the COVID-19 pandemic, the inflation
driven by the rising costs of food, utilities, and basic services, and the economic
ramifications of the wars and conflicts between oil-supplying countries, the
Philippines continuously experience the brunt of the continuous fuel price spikes.

Thus, in addition to the government’s anti-poverty measures provided
through the Pantawid Pamilyang Pilipino Program (4Ps), the Assistance to
Individuals in Crisis Situation of the Department of Social Welfare and
Development, the Tulong Pnghanapbuhay sa Ating Disadvantaged/Displaced
Workers (TUPAD) of the Department of Labor, and other social amelioration
programs of the government, this bill seeks to remove the excise tax on fuels that
will certainly alleviate the dire conditions of our poor countrymen.

In view of the foregoing, passage of this bill is earnestly sought.


RDIN THA oe

ONZALES, JR.

MANUEL JOSE “MANNIA” ALIPE

‘DPA MARIE K. ROMUALDEZ

JUDE #/ ACIDRE


Republic of the Philippines

House of Representatines

uexon City, Metra Manila

Nineteenth Congress
Third Regular Session

HOUSE BILL No. 11369

Introduced by Representatives Ferdinand Martin G. Romualdez,
Aurelio “Dong” D. Gonzales, Jr., Manuel Jose “Mannix” M. Dalipe,
Yedda Marie K. Romualdez and Jude A. Acidre

AN ACT
REMOVING THE EXCISE TAX ON FUEL, AMENDING FOR THE
PURPOSE REPUBLIC ACT NO. 10963, OTHERWISE KNOWN AS THE
“TAX REFORM FOR ACCELERATION AND INCLUSION (TRAIN)”
LAW

Be it enacted by the Senate and House of Representatives of the
Philippines in Congress assembled:

SECTION 1. Short Title — This Act shall be known as the “ Fuel Excise Tax
Repeal Act ”.

SECTION 2. Declaration of Policy —\t is hereby declared the policy of the
State to alleviate the economic burden on consumers by removing the excise tax
on fuel, thereby reducing the cost of petroleum products and promoting
equitable access to energy resources.

SECTION 3. Amendment of Section 43 of Republic Act No. 10963. — Section
43 of Republic Act No. 10963, otherwise known as the "Tax Reform for
Acceleration and Inclusion (TRAIN)" Law, is hereby amended to read as
follows:


"SEC. 43. Petroleum Products. - The excise tax on petroleum products
under this Act is hereby repealed. Accordingly, no excise tax shall be imposed
on the following products:

(a) Lubricating oils and greases; processed gas; waxes and petrolatum;
denatured alcohol to be used for motive power;

(b) Naphtha, regular gasoline, and other similar products of distillation;

(c) Leaded premium gasoline;

(d) Aviation turbo jet fuel;

(©) Kerosene;

@) Diesel fuel oil;

(g) Liquefied petroleum gas;

(h) Asphalts;

(i) Bunker fuel oil and on similar products; and

(j) Any other products classified as petroleum products ."

SECTION 4. Repealing Clause. — All laws, decrees, executive orders, rules
and regulations, or parts thereof inconsistent with the provisions of this Act are
hereby repealed or modified accordingly.

SECTION 5. Separability Clause. - If any provision of this Act is declared
unconstitutional or invalid, the other provisions not affected thereby shall
remain in full force and effect.

SECTION 6. Effectivity. - This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in a newspaper of general circulation.

Approved .