BOC, heeding Duterte, adds 10 percent tax on oil imports to raise COVID-19 funds

The Bureau of Customs (BOC) will start collecting an additional 10 percent duty on oil imports, an essential product, following President Rodrigo Duterte’s directive to raise more funds for COVID-19 response.

Customs Commissioner Rey Leonardo B. Guerrero issued Customs Memorandum Circular (CMC) No. 125-2020 on May 5, telling all deputy commissioners, district and port collectors to enforce Executive Order No. 113.

The EO temporarily modified rates levied on imported crude petroleum oil and refined petroleum products effective on May 6.

Assistant Customs Commissioner Philip C. Maronilla, also BOC spokesperson, told Inquirer that this would allow the bureau to collect P20 billion in additional revenue.

Guerrero said oil imports, “regardless of the country of origin, which are entered and withdrawn from warehouses in the Philippines for consumption” will be subjected to the temporary additional duty aside from their existing most favored nation (MFN) and preferential import duties.

“For petroleum products covered under the fuel marking program of the BOC, all district and port collectors must ensure that the additional 10-percent import duties as provided by EO 113 are assessed, levied, and paid, prior to fuel marking,” Guerrero said.

Under the fuel marking guidelines issued last year, the BOC conducts fuel marking in depots, tank trucks, vessels, warehouses and other fuel-transporting vehicles.

The fuel marking program—wherein a chemical marker gets injected into tax-paid goods—covered all taxable oil products, except Jet A-1, Avgas, crude oil, and liquefied petroleum gas (LPG).

The Customs Modernization and Tariff Act (CMTA) empowered the President to adjust oil import duties “in the interest of general welfare and natural security,” EO 113 noted.

In this case, the six-month state of calamity due to the COVID-19 pandemic required more money to fund the social amelioration program (SAP) and other safety nets for vulnerable sectors, especially poor households who lost sources of livelihood in the Luzon-wide lockdown.

Guerrero reminded BOC officials and employees that under the CMTA, “imported goods shall be subject to the import duty rates under the applicable tariff heading that are effective at the date of importation or upon withdrawal from the warehouse for consumption.”

“EO 113 shall remain effective until such time that Republic Act (RA) No. 11469 or the Bayanihan to Heal as One Act ceases to take effect, or upon the reversion of the modified rates of import duty to zero percent as international oil prices increase, whichever is earlier,” Guerrero said.

Edited by TSB