Vice President Jejomar C. Binay today called for a comprehensive study of proposals to reduce the 12 percent Value Added Tax (VAT) imposed on petroleum products as part of government’s efforts to mitigate the effects of escalating oil prices on consumers.
Binay cited a recent proposal made by former Budget Secretary Benjamin Diokno, who said that the VAT may be reduced or increased depending on the international crude oil prices.
“We owe it to the people to study the proposals to reduce the VAT on oil products, taking into consideration the effect of such a move on the consumers and revenues,” he said.
Binay also said the review should be part of other government efforts to address growing public concern over the hikes in oil prices.
The Vice President cited, in particular, government’s plan to expand and fine-tune the Pantawid Pasada and Conditional Cash Transfer (CCT) programs.
“These are programs that directly benefit the sectors who are deeply affected by the rising oil prices address,” he said.
He also urged sustained efforts to promote alternative modes of public transportation that run on renewable energy, such as electric jeepneys, which the Vice President said will greatly reduce operating costs and dependence on oil.
“The transport sector has expressed interest in electric jeepneys, and it is something that we should encourage,” he said, noting that Pasang Masda, a transport group, has already acquired an electric jeepney following a meeting with President Aquino where the Chief Executive encouraged them to switch to renewable energy.
The electric jeepneys were first introduced in the country during Binay’s term as Makati mayor. Electric jeepneys are now regularly plying the Central Business District (CBD) and recently received a franchise from the government.
“We would like to assure our people that all avenues to provide relief in the face of rising oil prices are being considered by the government,” he said.
Pump prices of oil has been increasing steadily owing to the rise of petroleum prices abroad.
On Thursday, Shell, Petron, Caltex, Total, Seaoil raised gasoline price by P0.60/L, diesel by P0.20/L, and kerosene by P0.25- P0.30/L.
In his proposal, Diokno said the government may reduce the VAT to 10 percent when international crude oil prices reach $120 per barrel. Conversely, it may increase the tax up to 15 percent when the prices reach $80 reach per barrel.