Shift taxes on oil products to private vehicles | Inquirer Opinion

Shift taxes on oil products to private vehicles

09:04 AM May 02, 2019

Everybody is complaining of the high prices of oil products and of the gigantic traffic mess. I suggest that all the taxes on oil products should be shifted to private vehicles, or those not registered with the Land Transportation Franchising and Regulatory Board.

If the government now earns P200 billion from excise, value-added and other taxes on gasoline and other oil products, let these be transferred to private vehicles and graduated according to their age and capacity for gas or diesel consumption.

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Thus, oil products would be tax-free while private vehicles would, say, be subject to:

  1. Age tax, so that 1-year-old vehicles would be subject to P1,000/annum; 2-year-old vehicles to P2,000/annum; 3-year-old vehicles to P3,000/annum; 4-year-old vehicles to P4,000/annum, and so on.
  1. Consumption tax, so that vehicles with engine displacement of 1,600 cubic centimeters or less, would be subject to P2,000/annum; 2,000 cc or less, to P4,000/annum; 2,400 cc or less, P6,000/annum; 2,800 cc or less, to P8,000/annum, and so on.

The amounts may be adjusted, but the idea is that old vehicles and gas guzzlers should be subjected to meaningful graduated taxes; and that the age and consumption taxes will approximate the amount of  taxes  the government receives from oil products.

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In Singapore, one can register a new vehicle if he buys a certificate of entitlement (COE) from the government. A  COE becomes available if one vehicle is junked or taken out of circulation. This procedure should also be followed here, except that a COE becomes available if two or three vehicles are junked.

I understand that in Japan, once a vehicle reaches 5 years old, it becomes very difficult to register it again. We don’t necessarily have to follow this. Furthermore, we should stop the importation of used vehicles and export our old vehicles to other places.

If these suggestions are followed, the number of private vehicles will plummet; the traffic mess would be alleviated and the P3.5 billion lost daily (per estimates by the Japan International Cooperation Agency)  would  substantially be saved. The environment would be much cleaner, and the economy would perk up.

RENE TORRES,

[email protected]

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TAGS: Inquirer letters, Rene Torres, taxes on oil products
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