Given the limited fiscal space of the government, the Makati Business Club (MBC) said a suspension of excise taxes on fuel will further erode the governmentโs ability to provide the short-term targeted assistance needed while other medium and long-term projects are being implemented.
In a statement, the Makati-based businessmen said that perhaps most importantly, suspending excise taxes has the same effect as a broad fuel subsidy that will maintain demand levels higher than they otherwise would be, at a time when supply is in question given the current geopolitical situation.
In noted that the companies they represent “do not need subsidies” which should be directed to jeepney drivers, etc. But MBC said they do need supply, and believe an efficient market and enlightened regulation is their best bet at securing it.
There should be many other initiatives that the government and the private sector can work on together to make the economy more efficient and resilient that will need funding. Thus, the statement emphasized “foregoing the excise taxes will make it more difficult for the government to support all these needed initiatives/reforms.”
The Makati Business Club underscored the importance of clear, consistent, predictable, and transparent policy to attract and retain investment, which is much needed to generate more jobs and grow the economy.
“Letโs use this crisis as an opportunity to effect and institutionalize the much needed reforms so we come out much stronger and we can realize the full potential of our country,” the statement concluded.
