MANILA, Philippines - The House of Representatives, voting 246-9 with one abstention, approved on third and final reading yesterday a bill imposing a P6 tax on diesel, kerosene, liquefied petroleum gas and bunker oil, which is used to produce electricity.

The measure also increases existing taxes on gasoline and other oil products, and those on cars.

The levies are feared to have a cascading effect on fares, transportation and electricity costs, and eventually on the prices of goods and services.

To lessen the impact of higher prices on salaried workers, the bill also reduces individual income tax.

Several senators have vowed that the tax reforms will not be railroaded through the chamber.

The bill, principally authored by Quirino Rep. Dakila Cua, is based largely on the tax reform package of the Duterte administration and put together by the Department of Finance (DOF).

The DOF estimates that the government would collect a total of P360 billion in additional revenues from the new and higher taxes, while it would lose P140 billion from income tax reduction, or a net gain of P220 billion.

This means an additional burden of P220 billion a year on the part of taxpayers, critics of the Cua-DOF bill said.

Administration officials said the net collections would be used to fund the ambitious “build, build, build” infrastructure program of President Duterte.

The new and higher levies would take effect on Jan. 1, 2018.

The P6 tax on diesel, kerosene, cooking gas, and bunker oil would be spread over three years: an initial P3 next year, an additional P2 on Jan. 1, 2019 and another P1 on Jan. 1, 2020.

Taxes on gasoline and other oil products, including grease, wax, asphalt and aviation fuel, would go up to P8, P9 and P10 per liter or kilogram.

Existing levies on these products range from P3.50 to P5.50.

The Cua-DOF bill also lifts tax exemptions on a range of services, including money remittances, and on lottery winnings.

Before finally approving the bill, the House introduced two major last-minute changes: the increase in the amount of tax-free bonuses from P82,000 to P100,000 and the retention of the value-added tax exemption of cooperatives.

The Cua-DOF measure exempts annual income of P250,000, plus bonuses of up to P100,000, from taxation.

The other tax rates are 20 percent of the excess over P250,000 for earnings ranging from P250,000 to P400,000; P30,000 plus 25 percent of the amount exceeding P400,000 for income from P400,000 to P800,000; P130,000 plus 30 percent of the excess over P800,000 for earnings from P800,000 to P2 million; P490,000 plus 32 percent of the amount exceeding P2 million for income from P2 million to P5 million, and P1.450 million plus 35 percent of the excess over P5 million for earnings above P5 million.