The Department of Trade and Industry (DTI) said the excise tax on petroleum products and tax on sugar-sweetened beverage (SSB) as provided for under the Tax Reform for Acceleration and Inclusion (TRAIN) Act should not yet impact on prices of fuel and sweetened beverages.
In a text message Wednesday, DTI Secretary Ramon Lopez told reporters that current supplies of petroleum products and sugar-sweetened beverages are still from the period before the new tax law took effect.
TRAIN law took effect on New Year’s Day.
“No impact yet on gas stations. They carry inventory, typically two to three weeks, of old costing without excise tax,” Lopez said.
“The increase yesterday due to the usual ups and downs of world oil prices which petroleum companies announce from time to time,” he added.
Oil firms hiked pump prices Tuesday by 20 centavos for gasoline and 65 centavos for diesel.
The TRAIN law slaps diesel fuel with PHP2.50 per liter excise tax while PHP7 per liter for regular and unleaded premium gasoline.
“DOE (Department of Energy) covers monitoring of gas station prices, but DTI can coordinate with them for monitoring or receiving consumer complaints,” the trade chief said.
Likewise, Lopez said prices of sugar-sweetened beverages like soft drinks should not yet carry additional prices brought by the SSB tax under the new tax law.
He added that DTI is confirming with soft drink companies on their inventories and buffer stocks.
But commonly, a twice a month delivery makes two weeks of inventory, according to the DTI chief.
“If so, we can mandate SSB prices at retail not to change until Jan. 15,” he noted.
Under the TRAIN Act, beverages using caloric and non-caloric sweeteners now have PHP6 per liter SSB tax while those using high fructose corn syrup has rate of PHP12 per liter.
Moreover, Lopez said TRAIN law’s impact to inflation would be minimal.
“This is validated by the fact that the increase brought about by excise tax is about 7 to 8 percent and the fuel and transport cost as percentage of production cost is less than 5 percent. Thus, effect would be around 0.4 percent,” he said.
“Manufacturers and retailers should not increase prices. We watch out for hoarders and profiteers. We monitor closely price changes and also ensures prices are below SRPs (suggested retail prices),” said Lopez. (Kris Crismundo/PNA)