DoF steps up drive against smuggling of oil products
Customs to start using special chemical markers
By Michelle Remo - Inquirer
To cut revenue losses from oil smuggling, the Department of Finance (DoF) has ordered the use of chemical markers on imported petroleum products that are exempt from excise tax and duties.
Department Order No. 23-2007 states that kerosene, which is exempted from excise taxes, and diesel imported by duty-exempt locators in special economic zones, should have the special markers.
The DoF said the use of chemical markers on oil imports would be pilot-tested at the Subic Freeport, Clark Special Economic Zone and the Port of Batangas.
Special machinery will be installed in these zones to verify the presence of the right concentration of chemical markers added to the petroleum products.
Internal revenue and customs officials will thus be able to collect the necessary taxes and duties on unmarked oil products.
Oil imported by economic-zone locators, which are allowed to import capital goods without duties as a reward for their dollar contributions to the economy, are not allowed to be consumed outside the economic zone or free port zone.
But finance officials had said that some oil imports that were declared to be duty-free were being consumed outside the economic and free port zones.
They added that some traders falsely declare their oil imports as kerosene just to escape payment of excise tax.
Finance Undersecretary Gil Beltran said that according to DoF estimates, the government lost P1 billion in the first quarter alone due to oil smuggling and misdeclaration of oil imports.
The DoF said in the department order: “There are reliable reports that said tax- and duty-free articles have been subsequently entered into the domestic market illegally without the payment of the proper duties and/or taxes due thereon, resulting in huge revenue losses to the government and to legitimate oil companies.”
A Program Implementation Office will be established to monitor the use of chemical marks on imported oil that are duty- and tax-free.
The office will be headed by a senior official from the DoF and will have the commissioners of the bureaus of internal revenue and of customs, or their representatives, as members
By Michelle Remo - Inquirer
To cut revenue losses from oil smuggling, the Department of Finance (DoF) has ordered the use of chemical markers on imported petroleum products that are exempt from excise tax and duties.
Department Order No. 23-2007 states that kerosene, which is exempted from excise taxes, and diesel imported by duty-exempt locators in special economic zones, should have the special markers.
The DoF said the use of chemical markers on oil imports would be pilot-tested at the Subic Freeport, Clark Special Economic Zone and the Port of Batangas.
Special machinery will be installed in these zones to verify the presence of the right concentration of chemical markers added to the petroleum products.
Internal revenue and customs officials will thus be able to collect the necessary taxes and duties on unmarked oil products.
Oil imported by economic-zone locators, which are allowed to import capital goods without duties as a reward for their dollar contributions to the economy, are not allowed to be consumed outside the economic zone or free port zone.
But finance officials had said that some oil imports that were declared to be duty-free were being consumed outside the economic and free port zones.
They added that some traders falsely declare their oil imports as kerosene just to escape payment of excise tax.
Finance Undersecretary Gil Beltran said that according to DoF estimates, the government lost P1 billion in the first quarter alone due to oil smuggling and misdeclaration of oil imports.
The DoF said in the department order: “There are reliable reports that said tax- and duty-free articles have been subsequently entered into the domestic market illegally without the payment of the proper duties and/or taxes due thereon, resulting in huge revenue losses to the government and to legitimate oil companies.”
A Program Implementation Office will be established to monitor the use of chemical marks on imported oil that are duty- and tax-free.
The office will be headed by a senior official from the DoF and will have the commissioners of the bureaus of internal revenue and of customs, or their representatives, as members
Labels: customs, oil, smuggling, Subic Freeport
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