5 oil firms owe govt P4B in taxes, duties

Orders tighter examination of documents of oil shipments, especially those coming from the Ports of Manila, Subic Freeport, Clark and Batangas.

By William B. Depasupil Manila Times Reporter

The Presidential Antismuggling Group (PASG) and the Bureau of Customs are training their eyes on at least five oil firms, hoping to collect some P4 billion in back duties and taxes from grossly undervalued oil importations.

Undersecretary Antonio Villar, who heads the antismuggling group, identified the firms as Oilink International Corp., PTT Philippines Corp., Tri-Solid Corp., Mawab Resources Inc. and Andan Enterprises Inc.

Villar claims these firms committed tax fraud, which under the law should be penalized eight times the amount of the deficiency they incurred through misdeclaration and underdeclaration.

“The government stands to collect some P4 billion in tax deficiencies from [them],” he added. He said they are continuously monitoring the five oil firms on reports that Tri-Solid had shifted its operations from Subic to Cebu.

Villar’s group earlier exposed the tax fraud committed by Oilink, PTT Philippines, Tri-Solid, Mawab Resources and Andan Enterprises, which forced them to pay the government P482 million in back taxes and penalties.

Plus, if the oil firms are found guilty of defrauding the government of duties and taxes, Villar said, they will have to pay a total of P3.8 billion, based on the Tariff and Customs Code of the Philippines. This amount multiplied by eight the determined revenue loss of P482 million.

Customs Commissioner Napoleon Morales said demand letters were already sent to the five oil firms.

Morales said Oilink owes Customs P247.718 million. Unless payment is made, he said, Customs will auction the 8,500 metric tons of gas oil owned by the firm.

Charges have been filed against Oilink top officials Paul Chi Ting Co, chairman; Esteher Magleo, president; and 10 others.

The discrepancies in payments were divulged during post-entry audit of all oil companies and bulk shipments imported in the past three years. The demandable deficiencies are for gas oil importation discharged from the vessel M/T Pro-Giant in September 2004.

An investigating committee was able to uncover that Oilink only declared and filed entry for 26,964 metric tons of the 32,492 metric tons imported. The 5,528 metric tons of gas oil that was undeclared is rendered abandoned, since no formal entry permit was filed for it.

This translates to P132.21 million in foregone duties and taxes. Customs is also seeking additional payment of P221.28 million for penalties, equivalent to eight times the revenue lost under the amended Tariff and Customs Code.

PTT Philippines and Tri-Solid have also hundreds of millions of pesos in tax deficiencies that are now the subject of collection by Customs.

Morales earlier put on hold seven additional oil shipments of Andan Enterprises and Mawab Resources, pending payment of their back taxes and duties from previous importations.

The two firms also face possible investigation by the Bureau of Internal Revenue for possible tax evasion, particularly the possibility of discrepancy in input taxes and payment of value-added taxes.

Both firms were being investigated for grossly undervaluing their last two oil imports by P37 million. They denied the accusation.

Investigation showed Andan Enterprises had wrongfully declared at $286.05 per metric ton the value of its three entries of imported gas oil from Taiwan-based Formosa Petrochemical Corp. It was learned that the average value of imported gas oil amounts to over $500 per metric ton.

A similar case was discovered in the previous gas oil imports of Mawab Resources from South Korea. Customs records showed that Mawab had declared the value of its gas oil imports earlier this year at $344 and $286.05 per metric ton for its five entries that came in two shipments.

In a memorandum, Morales ordered tighter examination of documents of oil shipments, especially those coming from the Ports of Manila, Subic Freeport, Clark and Batangas, which handle most of oil imports coming into the country.