Fuel marking helps oil tax revenues top P500B | Inquirer Business

Fuel marking helps oil tax revenues top P500B

By: - Reporter / @bendeveraINQ
/ 02:22 AM September 01, 2022

Tax revenues collected with the help of fuel marking breached the P500-billion level a week before the fourth year of implementing this program aimed at eliminating oil smuggling.

With a revenue windfall from currently expensive fuel and the fight against smuggling deemed successful, Finance Secretary Benjamin Diokno would likely continue fuel marking beyond the 2023 mandate under the Tax Reform for Acceleration and Inclusion (TRAIN) Act, Customs Deputy Commissioner Teddy Sandy Raval told the Inquirer Wednesday.

ADVERTISEMENT

The latest Bureau of Customs (BOC) data obtained by the Inquirer showed that the import duties and other taxes generated from oil products since fuel marking was implemented in September 2019 totaled P505.3 billion as of Aug. 25.

As the Philippines is a net oil importer, the BOC collected the bigger chunk of revenues, amounting to P475.5 billion during the first four years of the fuel marking program. Amid downscaled domestic refinery operations among oil players, the Bureau of Internal Revenue collected a smaller P29.8 billion in excise taxes until last year.

FEATURED STORIES

BOC data showed that oil tax collections had grown yearly: P126.6 billion in the first year of fuel marking implementation; P158.4 billion during the second year; and P220.3 billion in its third year.

In terms of volume, 46.7 billion liters of tax-paid oil had been fuel marked up to Aug. 27—12.1 billion liters in the first year; 17.1 billion liters in the second year; and 17.6 billion liters in the third year.

By type, diesel accounted for the bulk, with a cumulative 28.2 billion liters of tax-paid volume, followed by gasoline with 18.3 billion liters and kerosene with 230.5 million liters.

Luzon biggest market

As of last week, 34.6 billion liters of oil had been fuel marked in Luzon, 9.6 billion liters in the Visayas and 2.5 billion liters in Mindanao.

Among the 28 oil firms participating in the fuel marking program, Petron Corp. had the largest volume of marked products, which reached 11.5 billion liters or nearly a fourth of the industry total.

As earlier reported by the Inquirer, the BOC wants to extend fuel marking’s five-year implementation. The TRAIN Law, which took effect in 2018, mandated it until 2023, but since marking activities only started in late 2019, the contract with the firm injecting chemical markers signifying correct oil tax payments had been extended to 2024.

A recent BOC report had shown a dwindling discrepancy between domestic import and foreign export records, which Raval had explained meant that the country’s second-largest revenue agency was already capturing oil imports correctly, with the help of fuel marking.

ADVERTISEMENT

Prior to fuel marking implementation, “from 2010 to 2018, the reported fuel exports to the Philippines are higher than the reported import value by the BOC” but since 2019, “the reported import value of the BOC increased and is close to the figures reported by the United Nations Conference on Trade and Development (UNCTAD), specifically in 2021 where BOC data was almost twice larger,” according to the report.

Government estimates in 2016 showed that oil smuggling and misdeclaration in the past resulted in annual foregone revenues amounting to P26.9 billion. The Manila-based Asian Development Bank and oil industry players had higher yearly tax revenue loss estimates of P37.5 billion and P43.8 billion, respectively.

The Department of Finance had projected fuel marking to plug P27-44 billion in revenue losses per year.

As Russia’s prolonged invasion of Ukraine skyrocketed global oil prices, the BOC’s revenues from fuel imports accounted for 42 percent of total collections in the first half of 2022, a bigger share than 37 percent during the first six months of 2021.

Read Next
Don't miss out on the latest news and information.

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: fuel marking, tax revenues
For feedback, complaints, or inquiries, contact us.

Curated business news

By providing an email address. I agree to the Terms of Use and acknowledge that I have read the Privacy Policy.



© Copyright 1997-2022 INQUIRER.net | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.