Pilipinas Shell pays P1.7B for back taxes under protest

Shell’s supply chain is further strengthened by the Subic Import Facility

MANILA, Philippines—Oil giant Pilipinas Shell Petroleum Corp. has paid nearly half of its back taxes, under protest, even as its imports may be stopped if it won’t settle the full amount next month.

Finance Secretary Carlos Dominguez III on Tuesday (Dec. 28) said the Bureau of Customs (BOC) already received P1.7 billion out of Pilipinas Shell’s total of P3.49 billion in unpaid excise and 12-percent value-added tax (VAT).

The BOC earlier ordered Pilipinas Shell to settle its initial payment on or before Dec. 27.

Dominguez said the balance will be due on Jan. 10, 2022.

Customs Assistant Commissioner Vincent Philip Maronilla, also Customs spokesperson, said the BOC and Pilipinas Shell had agreed on payments in two tranches.

“Pilipinas Shell is committed to pay the entire amount, under protest,” Maronilla said in a phone interview.

But Maronilla warned that suspending Pilipinas Shell’s import accreditation was “still an option” if it failed to fully settle the BOC’s tax assessment.

“I am certain that the suspension of Pilipinas Shell’s import accreditation with the BOC will be reconsidered if the second installment is not received on the date indicated,” Dominguez said.

These unpaid dues had been slapped on Pilipinas Shell’s alkylate imports, which it used in its petroleum refinery operations from 2014 to 2020.

The Supreme Court early this year lifted the temporary restraining order (TRO) against these taxes, paving the way for the BOC’s collections.

Last year, Pilipinas Shell closed its Batangas refining operations amid declining margins aggravated by low domestic oil demand at the height of the most stringent lockdowns, which limited the movement of people and non-essential goods, imposed to contain the spread of COVID-19.

TSB