October 23, 2017, 3:44 pm
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Fuel marking to yield P20B

The Department of Finance (DOF) said the procurement of the fuel marking system will have a proposed budget of P2 billion for 2018, with the measure seen to yield, at least, an additional P20 billion in tax revenues.

The DOF previously said fuel marking system will help  prevent oil smuggling and will complement efforts at improving the collection of fuel excise taxes.

The scheme, eyed for implementation next year, is included in the proposed tax reform program.

“There is a request for a supplemental budget (for the procurement services of the fuel marking program). Under the Senate version, the additional increase (in revenues) is P20 billion. But the actual losses (from oil smuggling) is around P25 billion to P40 billion,” said Mark Joven, DOF assistant secretary,

Carlos Dominguez III, finance secretary, said  by spending P2 billion next year for the procurement of the fuel marking scheme, the Bureau of Internal Revenue will be able to capture more of the taxes on fuel.

“It’s not only raising revenues through taxes, but with actual implementation… We are getting serious about implementing the law,” Dominguez said.

For his part, Isidro Lapena, customs commissioner, said a technical working group was created last September and that its work is “moving forward very well.”

“It could be bid out, it can be build-operate-transfer, those mechanics are being discussed, or it can be just the service, that they will maintain the markers, and then the BOC will just collect from those discovered fuel products that have not yet been taxed properly,” he said.

The cost per liter will depend on what the bidder will submit, but it is estimated at around nine centavos per liter.

Fuel marking uses advanced technology molecular markers and sophisticated management systems that track fuels that are imported, processed and sold. It can be in the form of chemicals like dyes. 
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