Staff in a gasoline station presenting the different fuels available in the pump
Photo from THEPHILBIZNEWS
By Alithea De Jesus
Proving the fuel marking that was implemented by the government under the Duterte tax administration measure to prevent fuel fraud and smuggling and ensure equal tax rates are imposed on different kinds of fuels, Finance Secretary Carlos Dominguez III has lauded the Revenue Operations Group of the Department of Finance (DOF-ROG) along with the Bureaus of Customs (BOC) and of Internal Revenue (BIR) for the successful implementation of a full-fledged fuel marking program that has now entered its second year with over 12 billion liters of petroleum products marked as of the second week of September.
According to a report by Finance Undersecretary Antonette Tionko, who heads the DOF-ROG, the volume of fuel marked from Sept. 4, 2019 to Sept. 17 this year totaled 12.71 billion liters.
The government has collected a total of P131.17 billion in taxes and duties from the fuel marking program. From September 2019 up to Sept. 17 this year, the BOC collected P112.35 billion of duties and taxes, while the BIR yielded P18.82 billion in taxes from December 2019 to September 10 this year.
The cost of the fuel marking program’s first year of implementation was shouldered by the government, but beginning Sept 4, oil companies have been paying for the fuel marking fees, said Tionko in her report to Dominguez during a recent DOF Executive Committee (Execom) meeting.
“By the way, congratulations to ROG, BIR and BOC on this fuel marking program,” Dominguez said during the Execom meeting after being briefed by Tionko on the status of the project. “You have implemented it and are already coming on your second year. So congratulations.”
From the second year to the fifth year of implementation, oil companies are required under this fuel marking program to pay a very minimal amount of P0.06884 (VAT-inclusive) per liter of fuel marked under this project designed to combat oil smuggling.
Fuel marking is mandated under the Tax Reform for Acceleration and Inclusion Act (TRAIN) as a measure against the smuggling of petroleum products.
Fuel marking is done after the taxes are paid on refined and imported gasoline, diesel and kerosene.
The DOF, BOC and BIR issued last Aug. 28 Joint Memorandum Order (JMO) No. 1-2020 prescribing the implementing guidelines for the collection and disbursement of the marking fees from the second- to the fifth-year implementation of the fuel marking program.
Under the JMO, the BOC shall collect the fuel marking fees on imported petroleum products while the BIR shall collect the fees for locally refined or manufactured petroleum products.
“The BOC and BIR shall commence collection of the Fuel Marking Fees on all manufactured, refined or imported petroleum products withdrawn and/or lodged beginning 4 September 2020,” the JMO states.
It also states that the “Fuel Marking Fee shall be characterized as a non-revenue collection, recorded as trust receipts and credited to the Fuel Marking Trust Account to be maintained by the Bureau of the Treasury (BTr).”
According to the JMO, “the BOC shall be responsible for payment of the amount due to the Fuel Marking Provider for Marking Services rendered based on the contract price in the amount of six thousand, eight hundred eighty-four hundred thousandths centavos per liter (P0.06884 per liter) for the second through the fifth year of the Fuel Marking Program.”