Lawmaker proposes tax on beauty and cosmetic products amid calls to increase fuel excise tax

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To address a shortfall in government revenues, a lawmaker proposes a tax on beauty products and aesthetic procedures instead of petroleum.

Metro Manila (CNN Philippines) — Beauty and cosmetic products and procedures may cost more if a bill proposing taxes on these is passed.

The bill proposed by Ako Bicol Partylist Representative Rodel Batocabe comes as government pushes for a long-overdue adjustment in the excise tax on petroleum products.

An excise tax on petroleum products will "consequently increase the price of goods and commute," directly affecting "Filipinos below the poverty line," said Batocabe in the bill he filed.

"In comparison, any increase of price for beauty and cosmetic prodcuts and services shall only be shouldered by those who choose to and can afford it," he said.

Batocabe proposes amending the list of non-essential goods listed in Section 150 of Republic Act No. 8424 or the Tax Reform Act of 1997. Such non-essential goods include jewelry, pearls, precious stones, perfumes, and toilet waters, among others.

"Raising the 20 percent excise tax on perfume and toilet waters to 30 percent would be preferable than any rise on our fuel prices," the bill filed said.

In his proposal, Batocabe included "cosmetic products, or any substance or preparation intended to be placed in contact with the various external parts of the human body or with the teeth and the mucous membranes of the oral cavity, with a view exclusively or mainly cleaning them, perfuming them, changing their appearance, and/or correcting body odor, and/or protecting the body or keeping them in good condition."

Gov't losing billions from poor fuel tax scheme

The fuel tax increase referred to by Batocabe is one of the proposals pushed by the government to increase revenue.

The Department of Finance said the government has lost about P145 billion in revenues since gasoline excise taxes have remain unchanged for the past 20 years, while diesel products have been exempt from taxes for 12 years.

"These rates, which have not been corrected to account for inflation, has led to a massive foregone revenue loss of about P145 billion (in 2016 prices), which represents over one percent of the GDP," said finance department undersecretary Kendrick Chua.

"Our proposal to adjust the fuel excise tax to around P6 per liter merely updates the rates to current levels as this represents the cumulative inflation since 1997. Even with the adjustments, the retail prices of gasoline and diesel will still be much lower than the rates during the oil price shocks of 2011 and 2012," Chua added.

Transport group Pasang Masda on Tuesday expressed its opposition to an increase in fuel excise tax, saying this would result in jeepney fares rising by P3.. The increase will be borne by milllions of commuters.

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