Starting on Friday (Sept. 4), oil companies will shoulder the costs of fuel marking on top of paying import duties and other taxes as the one-year coverage of costs by the government lapses this month.
The cost of fuel marking is just a fraction of a peso—0.06884 peso per liter.
Finance Secretary Carlos G. Dominguez III, Internal Revenue Commissioner Caesar R. Dulay, and Customs Commissioner Rey Leonardo B. Guerrero on Aug. 28 issued Joint Memorandum Order No. 1-2020 listing the implementing guidelines to collect and disburse fuel marking fees.
Under the Tax Reform for Acceleration and Inclusion (TRAIN) Act, the government shouldered the fuel marking cost during the law’s first year of implementation.
Since the fuel marking program officially began in September 2019, the joint order said the Bureau of Customs and Bureau of Internal Revenue “shall commence collection of fuel marking fees” starting on Sept. 4, 2020.
To heed biofuel requirements of the Biofuel Act of 2006, or Republic Act No. 9367, the order said “a volume percentage allowance shall be added to the declared volume of the petroleum product to be marked.”
The order also detailed the computation of fuel marking fees for gasoline, diesel and kerosene.
It said the BIR and BOC “shall collect the fuel marking fee at the same time as internal revenue taxes” from petroleum products. “The fuel marking fee and the internal revenue taxes must be paid by the importer or refiner prior to the marking activities,” the order read.
The BOC, the order said, would handle payments for “fuel marking provider for marking services” from the second to the fifth year of the fuel marking program.
The fuel marking provider—the joint venture of SGS Philippines Inc. and Switzerland-based SICPA SA under a five-year contract –currently churned out the ready-to-use official marker and conducted marking by injecting the chemical signifying correct tax payments.
As of August, the fuel marking program ensured collection of almost P100 billion in taxes from over 11 billion liters of oil products nationwide.