Diokno signals Finance dep’t studying carbon tax feasibility
FINANCE Secretary Benjamin E. Diokno said his department is considering a carbon tax, and is currently working out whether such a measure is practicable.
“Carbon tax too, if feasible,” Mr. Diokno told reporters in a Viber message after being queried on fund-raising initiatives under consideration by the new government.
Asked to elaborate on the carbon tax, Mr. Diokno did not respond.
A tax on carbon emissions was contemplated in the third package of former Finance Secretary Carlos G. Dominguez III’s fiscal consolidation plan.
If approved, the third package is set to be implemented in 2025. The impact on government revenue has yet to be determined.
A carbon tax is levied on businesses that emit carbon dioxide, with the proceeds helping support greenhouse gas mitigation projects while forcing companies to address their own emissions to minimize their tax exposure.
Mr. Diokno also signaled the possibility of imposing a tax on single-use plastics in an interview with the ABS-CBN News Channel on Wednesday.
“The Philippines is probably one of the most vulnerable with respect to climate change, and so it is in our own interest that the movement towards climate change should be supported,” he said. “I think we on our part, on the tax side, should think of some measures that we can do to reduce pollution. For example, a tax on single-use plastic is worth considering.”
A P20 excise tax per kilogram of single-use plastics was also part of the previous government’s fiscal consolidation plan, although it had been targeted for rollout in 2023.
The previous government estimated that the tax can raise P249 billion or more every year, with the revenue going towards paying down the P3.2 trillion in additional debt incurred during the pandemic.
At the end of May, National Government debt stood at P12.5 trillion.
Mr. Diokno formerly served as co-chair of the previous administration’s so-called “Green Force,” an Inter-Agency Task Force for Sustainable Finance.
The task force supported the Sustainable Finance Roadmap that hopes to unlock financing for green initiatives.
In April 2021, President Rodrigo R. Duterte approved the Philippines’ first Nationally Determined Contribution, which set a target of reducing greenhouse gas emissions by 75% by 2030. — Diego Gabriel C. Robles