The Bureau of Customs will implement a fuel-marking program in a bid to stop fuel smuggling which has cost the government to lose at least P30 billion in revenue a year.
Customs Commissioner Isidro Lapeña said the bureau is one of the agencies tasked to implement the fuel marking program mandated under the Tax Reform for Acceleration and Inclusion law, as part of the government’s anti-oil smuggling scheme.
Imported or locally refined fuel is marked with colored dyes to determine whether batches of petroleum products have gone through the supply chain legally and respective taxes have been paid.
If products are found to have no markings, it will be used as evidence against erring fuel importers or manufacturers for nonpayment of proper taxes.
Lapeña said the fuel marking program shall be mandatory for five years.
According to the DoF, in 2016, the revenue loss from excise taxes and VAT due from smuggled or misdeclared fuel oil is estimated at P26.87 billion.
He said the anti-oil smuggling scheme is seen to boost the collection of the revenue generating agencies, BOC and BIR, by P20 to P40 billion.
A total of 20,000 tests will be conducted based on BOC and BIR’s risk assessment and monthly operational plan. This is to check whether petroleum products available in the market have paid the corresponding duties and taxes.
“The fuel marking is required on all petroleum products that are refined, manufactured, or imported into the Philippines that are subject to the payment of duties and taxes such as but not limited to gasoline, denatured alcohol used for motive power, kerosene, and diesel fuel oil after the taxes and duties have been paid,” the BOC chief said.
If the petroleum products do not contain the official marker or which contain the official marker but are diluted beyond the acceptable percentage, it shall be presumed that it was withdrawn with the intention to evade payment of taxes due.
“We will implement the law to plug leakages caused by fuel fraud. A robust fuel-marking program will help return the stolen revenue to the government,” the Commissioner added.