Raising Fuel Taxes Better Than Giving Out Subsidy — IMF Exec

Agac, Bataan (PNA) — An official of the International Monetary Fund (IMF) favors the increase of excise tax on fuel against extending fuel subsidy as oil prices have gone down.

IMF Country Representative to the Philippines Shanaka Peiris, in a briefing at the sidelines of the Asia-Pacific Economic Cooperation (APEC) Workshop on Fiscal Management Through Transparency and Reforms held at the Las Casas Filipinas de Acuzar, Bagac, Bataan, said raising excise tax would be a good move towards implementation of a comprehensive taxation as burden of those taxes has declined.

“This is a very good time to have a rationalization of fuel excise tax because the real burden of those taxes have come down,” he said.

Relatively, Peiris said fuel taxes, just like sin tax, is not only beneficial to government revenues but the environment as well.

“And those revenues can help you potentially on comprehensive tax which which is more inclusive for example by having VAT (value added tax) reform,” he said.

Implementation of various kinds of taxes and its impact on government revenues and the bid for inclusive growth is among the topics discussed during the two-day event.

Peiris cited the need for reforms on public policy and financial reforms to ensure that government create revenues, which would be used to finance more social programs.

He said delegates of the APEC Workshop are one in their belief for the need to have inclusive taxes and progressive tax system since these are good factors of an inclusive growth package. (PNA) LGI/JS/SSC