BIR starts fuel marking rollout

MANILA, Philippines — The Bureau of Internal Revenue (BIR) will start this month its monitoring of gas stations’ inventory in line with the full implementation of the fuel marking program.

“In preparation for the field testing aspect of the fuel marking program, all gasoline stations nationwide are required to submit a sworn declaration statement of inventory identified per branch as of Dec. 31, 2019, on or before Jan. 15, 2020, specifying the volume and type of petroleum products, namely diesel, gasoline and kerosene, to the revenue district office (RDO)/large taxpayers (LT) division where the principal place of business is registered,” Internal Revenue Commissioner Caesar R. Dulay said in BIR Revenue Memorandum Circular No. 2-2020.

“The concerned RDO shall consolidate the submitted report and transmit the same to the excise LT field operations divisions on or before Jan. 31, 2020. This report shall state whether the inventory has been marked or not to serve as the initial database for monitoring and field testing,” Dulay said.

Under the joint BIR, Bureau of Customs (BOC), and Department of Finance (DOF) fuel marking guidelines issued last year, the country’s biggest tax-collection agency will supervise field testing in refineries, their attached depots, gasoline stations, and other retail outlets.

Meanwhile, the BOC will oversee fuel marking in depots, tank trucks, vessels, warehouses, and other fuel-transporting vehicles.

The fuel marking rules had granted the BIR and the BOC with deputization and police authority during field testing—in case they found adulterated, diluted or unmarked petroleum, officers can not only seize these products but also arrest unscrupulous traders.

By Feb. 3 this year, all retailed diesel, gasoline and kerosene were expected to be injected with a chemical marker that serve as proof that the product had paid the proper customs duties (if imported) and other taxes (if refined locally).

Fuel marking costs P0.06884 per liter and was being shouldered by the government during the first year of implementation, after which the payments will be sourced from the trust receipt created under the Tax Reform for Acceleration and Inclusion (TRAIN) Act.

The fuel marking provider—the joint venture of SGS Philippines Inc. and Switzerland-based SICPA SA under a five-year contract—was not only producing and providing the ready-to-use official marker, but also conducting actual fuel marking nationwide in all taxable oil products.

The fuel marking program was expected to minimize smuggling and misdeclaration in order to jack up the collections of the BIR and the BOC—the country’s two largest revenue agencies.

Customs Commissioner Rey Leonardo B. Guerrero last week said that fuel marking will add P10 billion to the BOC’s collections in 2020.

The DOF’s earlier estimates had shown revenue losses from excise taxes and value-added tax (VAT) due to oil smuggling and misdeclaration reached P26.9 billion in 2016, almost half of the actual P52.6 billion collected by the BIR and the BOC that year.