The exchange of information between the Department of Energy (DOE) and the government’s main revenue agencies will boost the implementation of the first-ever nationwide fuel marking program and further strengthen its fight against oil smuggling, Finance Secretary Carlos Dominguez III said Thursday.
Dominguez said he expects the Memorandum of Agreement (MOA) on Information Exchange and Reconciliation signed this morning by the DOE with the Bureaus of Internal Revenue (BIR) and of Customs (BOC) to curb smuggling and the misdeclaration of imported petroleum products.
This, in turn, will lead to increased revenue collections, while ensuring fair competition among oil companies, he said.
“Having gone through the ravages of a pandemic and funding our nation’s economic recovery, the government needs all the revenue it can muster,” said Dominguez in his pre-recorded message during the virtual signing ceremony of the MOA.
“Properly collecting all taxes due from the oil industry is indispensable to this effort. This will help us surmount the global health emergency and bring the country back to the path of inclusive growth. A better future for our people depends on this,” he added.
The MOA formalizes the continued partnership among the DOE, BOC and BIR in running after oil smugglers with their commitment to exchange information and reconcile the volumes of imported and exported crude oil, finished petroleum products and bioethanol, denatured imported bioethanol, and inventory reports.
Dominguez said the importance of the MOA “cannot be understated” as its deliverables are designed to support the work of a joint task force set up by the BOC and BIR to perform the field testing activities under the fuel marking program.
“I trust that the agencies involved in this initiative will be up to the task of making our fuel marking program an effective instrument to put an end to oil smuggling and be a model for other countries to follow,” Dominguez added.
The implementation of the fuel marking program is among the key provisions of the Tax Reform for Acceleration and Inclusion (TRAIN) Law, which is the first package of the Duterte administration’s Comprehensive Tax Reform Program (CTRP).
With the adjustments in the taxes imposed on petroleum products under TRAIN, the fuel marking program was mandated under this law to help reduce oil smuggling.
As of May 13 of this year, the government has collected a total of P229.5 billion in taxes from 23.59 billion liters of fuel marked under the program that was launched last Sept. 4, 2019.
Of the total amount, the BOC accounted for P201.58 billion of the tax haul, while the BIR collected another P27.92 billion.
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