|Title||The Coal tax increases in the Philippines|
|Date||2018-01-23 PM 4:47:26||Hit||49|
A tax increase on coal aims to lessen the Philippines¡¯ dependency on the fossil fuel as an energy source, bring down one of Southeast Asia¡¯s highest electricity rates, and slash carbon emissions.
The coal industry has been exempt from paying excise tax for the last 40 years, despite the industry¡¯s rapid expansion in the country. This has assured the coal industry of bumper returns, but consumers are left with the burden of absorbing the risks of pricier electricity from imported coal.
In December 2017, President Rodrigo Duterte signed into law the Tax Reform for Acceleration andInclusion (TRAIN) bill, which includes excise and value added taxes on imported coal from Indonesia and Australia.The Philippines imports 75 per cent of its coal supply. Out of the total supply of imported coal, 70 per cent comes from Indonesia while 15 per cent from Australia.
The tax reform measure raises the excise tax on coal from its current rate of US$0.20 per metric tonne US$1 up to US$3 per metric tonne over the next three years. The tax hike is expected to bring in P2 billion (almost US$40 million) in total revenues this year, according to the Department of Finance.
This would translate to much needed investment in infrastructure and social development like the government-initiated Ambisyon 2040—the long-term vision of the Philippines to align with the United Nations¡¯ Sustainable Development Goals agenda and adapt it to the local context.
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