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A position paper on Excise Tax

By: Marnel Utlang

Introduction
Excise tax refers to an indirect type of taxation imposed on the manufacture, sale or use
of certain types of goods and product. Excise taxes are commonly included in the price of a
product such as cigarettes or alcohols as well as in the price of an activity, often gambling.
Excise taxes may be imposed by both Federal authorities. The implementations of excise taxes
allow federal government the means to raise additional revenue necessary for large projects such
as social programs. This paper includes the anti-excise tax and the implementation of excise tax
in the Philippines.
Counter Arguments
Excise taxes give government a lot of revenue. Excise taxes are also a good thing is to
somewhat control what the people are buying. Since the two taxes largely, apply to the same
types of goods, people are force to pay tax twice over on the same items once though excise
upon purchase and the second time around through customs duties upon transportation. Due to
reduce taxes, the government need to make up for lost of revenue. Because of the certain good
will have higher taxes. Buyers and consumers should expect higher prices for fuel and gas,
electricity, vehicles, tobacco, and other products and services. Through income taxes will greatly
decrease for almost all employees, they would need to spend more on things that they might
need.
Aside from increased prices of goods, Roque also said documentary stamp tax (DSF),
which is a tax levied on special document, papers, arguments, etc., increase 50 percent to 100
percent, except for property, savings and for life.
“Foreign deposit units increased from 7.5 to 15 percent final tax on interest income.
Capital gains of non-traded stocks increase from 5-10 percent to 15 percent final tax on get gains
only“Roque said.

Counter Arguments
Its official President Rodrigo Duterte has signed the first phase of tax reform bill. This
means that the excise taxes on fuels and vehicles, along with other commodities, will take effect
on January 1, 2018. This reform claims to raise Php 130 billion in revenues infrastructure,
projects and other programs for the current administration.
The much-admired “Build, Build, Build” program shall create basic simple labor skills
employment. However, in order to realize the full circle inclusiveness, this program should be
made to produce not only its basic benefit of facilitating transactional and commercial processes
but more so to bring in heave manufacturing investments which, by the nature of its demand,
shall develop higher level of skills, technology and related exciting academic preparations.
Likewise, this will promote the growth of MSMEs in number and quality, which account for
over 60% of our employment. Power quality and competitive cost are the key to achieving this
objectives.
It is therefore imperative that any policy affecting the quality and cost of power supply
should be approached with active awareness and purpose of enhancing the key elements of our
economy and that the same shall promote sensitive inclusiveness. Power quality and cost are,
indeed, among those critical elements that are always viewed with clinical evaluation by foreign
and local investors, especially when regards to heavy or so called “Bricks and Mortars” type of
production, which we need to focus on, too. Many have left some years ago due to high and
unpredictable power cost and policies.

Conclusions
If companies pay taxes relative to the quantity of goods sold rather than the value of the
certain good, the big companies that sell more pay more taxes and those companies that can’t
compete to those larger companies don’t have to pay taxes to those large companies.
Excise taxes are taxes paid when purchases are made on specific good, such as gasoline.
Excise taxes are often included in the price of the product. There are also excise taxes on
activities, such as on wagering or on highway usage by trucks. One of the major components of
excise program is motor fuel. To continue unlocking our countries economy potential and
improve living standards, power supplies must be delivered in an accessible, affordable, reliable,
sustained and competitive manner. And we need to drive our economic inertia to the level of
over 7% per annum in order to make real significant comparative gain over our neighbors in the
region and achieve real inclusiveness. This is to be achieved in a very competitive and
unforgiving international environment. And we can do it.