Inquirer News Service
OIL prices will further increase by an average of 6.4 percent when the expanded value-added tax (VAT) law takes effect, Department of Finance officials said Tuesday.
The Supreme Court recently declared the new VAT law, which removes exemptions of certain sectors, including oil and electricity, as constitutional. Opponents of the law are expected to ask the court for reconsideration, pending which the court's temporary restraining order on implementation of the law stays in force.
Finance officials are hopeful the court will lift the restraining order before the end of the month.
The officials said government simulations based on oil prices as of Monday showed the price of unleaded gasoline would rise P2.76 or 8.3 percent when the VAT is applied.
Electricity prices are expected to inch up 6.0 percent, they said.
The price of regular gasoline will go up P2.23 or 6.9 percent, diesel by P0.72 or 2.3 percent, kerosene by P1.87 or 6.0 percent, bunker fuel by P1.31 or 6.5 percent, and liquefied petroleum gas (LPG) by P30.97 or 7.8 percent, they added.
RVAT, the name preferred by the Department of Finance to identify the new VAT law, has been suspended following complaints raised by opposition lawmakers and petroleum dealers.
The expanded VAT law gives President Gloria Macapagal-Arroyo conditional authority to raise the VAT rate to 12 percent, from the present 10 percent, in January.
The law also removes exemptions of medical and certain other services. With INQ7.
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