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DoF eyes P20 billion in additional taxes from fuel marking program

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PHILIPPINE STAR/MICHAEL VARCAS

THE government expects P20 billion in additional revenue this year as a program to mark all gasoline, diesel and kerosene products deters smuggling, the Department of Finance (DoF)said last week.

“With the full implementation of this program, we expect smuggling and misdeclaration of petroleum products to be greatly reduced, if not totally eradicated, and revenue collections to dramatically increase,” Finance Secretary Carlos G. Dominguez III said during anniversary rites of the Bureau of Customs (BoC). “This program is projected to generate an additional 20 billion pesos in revenues.”

This month marked the full rollout of the program after oil companies were given a year to mark their stocks while authorities conduct random field tests.

A total of 2.79 billion liters of petroleum products have been marked so far, 2.148 billion liters of which were marked by the Customs bureau and the remaining 642 million liters by the Bureau of Internal Revenue (BIR), Mr. Dominguez said, citing a Customs bureau report.

The numbers were lower than originally planned. Authorities had wanted to mark at least 15 billion liters of fuel products last year, with the Customs bureau projecting about 6.8 billion liters of gasoline, diesel and kerosene imports and the BIR expected to mark about 8.4 billion liters processed by domestic refineries.

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Fuel smuggling costs the government P20 billion to P40 billion in foregone revenue, according to estimates by the Finance department.

“That’s our suspicion that’s why we put it there, that not everybody was paying the right amount of tax,” Mr. Dominguez told reporters after Friday’s event. “We suspected that some people were not fully disclosing or fully paying the taxes.”

Aside from plugging tax leakages, the program could also deter importers from bringing in substandard petroleum products that did not pass environmental standards, the Finance chief said.

Fuel marking is an anti-smuggling measure. Fuel that has passed the various stages of tax compliance is marked by a special dye. The absence of a marker dye can be taken as prima facie evidence that no taxes had been paid on the fuel. — Beatrice M. Laforga

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