DOF: Fuel marking to generate P20-billion additional revenues

The fuel marking system to be implemented early next year as part of the first tax reform package will generate P20 billion in additional revenues for the government and combat oil smuggling, Department of Finance officials said.

Commissioner Isidro S. Lapeña told reporters recently that the DOF-attached Bureau of Customs had already created a technical working group on fuel marking as a means to collect the correct taxes from oil companies.

“We want to realize that as soon as possible but we are still firming up its mechanics, especially how to get the service provider. It could be bidded out, it can be build-operate-transfer, or it can be just the service that they could maintain the markers and then the BOC will just collect from those discovered not having paid the correct tariff on the item,” Lapeña said.

“Right now, we are thinking of a system similar to cigarette tax stamps, although stamps are physical while this is chemical. But for stamps, it’s a pass-on charge we collect from manufacturers. So here, we are working on a mechanism that the government will procure the fuel marker and then we sell [it to oil firms],” Finance Assistant Secretary Mark Dennis Joven said.

“The government will procure, then once the government has it already, then you charge them,” he explained.

Joven said the DOF plans to request P2 billion under a supplemental budget next year to rollout the fuel marking scheme.

“We have the money for it; right now, we have the funds for it,” Finance Secretary Carlos G. Dominguez III, for his part, said.

Finance Undersecretary Antonette C. Tionko said the private sector would still have to shell out nine centavos per liter.

Joven said that under the Senate version of the proposed first tax reform package, fuel marking will generate additional revenues of P20 billion, although foregone revenues from oil smuggling amount about P25-40 billion yearly. /je