DATE: March 28, 2021

TO: SyCip Gorres Velayo & Co. A Member Firm of Ernst & Young Global,
Limited

FROM: Laurence Brian Hagutin, JD

RE Legal Opinion on the news article titled: DBM: Govt could lose ₱117B if fuel
excise tax suspended (cnnphilippines.com)

I wish to render my legal opinion on this matter, to wit:

It is a basic rule of law that taxes are the lifeblood of the nation. Without taxes, the
government can neither exist nor endure. For this reason, taxes have been imposed
to generate funds for the operation of the government and its machineries.
The fuel industry is crumbling due to conflicts between Russia and Ukraine. The
fact that Russia is the leading producer of fuel in the world has an enormous
impact to the states dependent upon it. The Philippines felt it when the oil prices
soared in the last few weeks. The government is in dilemma whether to suspend or
not the imposition of the estates tax on fuel.
Perhaps, the Department of Finance is right when it opposed the suspension as it
would impair the taxing power of the government, thus, adversely affecting its
operations. I would also subscribe to the idea of the acting Presidential
Spokesperson Martin Andanar when he stated that it is a matter of balancing act.
For the meantime, matter such as increasing the revenues on other subjects of
taxation, while that of the estate tax be reduced, would be viable. While
suspending estate tax is in violation of the lifeblood doctrine, the proposition to
increase other areas of taxation and to reduce estate taxes does not. This could
mean that taxes are still in effect to serve public purpose which is the sole and only
purpose of taxation.