DOE, BOC, BIR join forces in war against oil smugglers

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Customs commissioner Rey Leonardo Guerrero (left, seated) during the virtual signing of the memorandum of agreement on information exchange with the Department of Energy and Bureau of Internal Revenue. Photo courtesy of BOC.
  • The Department of Energy, Bureau of Customs (BOC), and Bureau of Internal Revenue (BIR) have signed a memorandum of agreement (MOA) to exchange information on the government’s fight against fuel smuggling
  • The MOA formalizes the continued partnership among DOE, BOC, and BIR to run after oil smugglers, exchange information and reconcile volumes and inventory reports
  • The agreement is expected to boost the government’s fuel marking program
  • An Information Exchange and Reconciliation Committee will be created to monitor and report discrepancies in information on volumes of imported and exported crude oil, finished petroleum products and bioethanol
  • As of May 13, 2021, the government has collected a total of P229.5 billion in taxes from 23.59 billion liters of marked fuel

The Department of Energy (DOE), Bureau of Customs (BOC), and Bureau of Internal Revenue (BIR) have signed a memorandum of agreement (MOA) to exchange information to further strengthen the government’s fight against fuel smuggling.

Finance Secretary Carlos Dominguez III said he expects the MOA, signed on May 27, to boost government’s fuel marking program and curb smuggling and misdeclaration of imported petroleum products.

This, in turn, will lead to increased revenue collections, while ensuring fair competition among oil companies, he said in a statement.

“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.

For his part, Customs Commissioner Rey Leonardo Guerrero said: “Through this memorandum of agreement, the BOC looks forward to building a better, more transparent partnership with the DOE and the BIR, moving towards the common vision of curbing oil smuggling and ensuring proper assessment of taxes through regular information exchange.”

The MOA formalizes the continued partnership among DOE, BOC, and BIR in running after oil smugglers, exchanging information, and reconciling the volumes of imported and exported crude oil, finished petroleum products and bioethanol, denatured imported bioethanol, and inventory reports.

Under the MOA, an Information Exchange and Reconciliation Committee will also be created to monitor and report any discrepancies or variance in the information on volumes of imported and exported crude oil, finished petroleum products and bioethanol.

The implementation of the fuel marking program is among key provisions of the Tax Reform for Acceleration and Inclusion (TRAIN) Law. Marking of fuel products, whether imported or manufactured in the Philippines, will become mandatory five years after the TRAIN Law took effect on January 2018. Fuel marking aims to curb oil smuggling and plug revenue losses arising from the illegal importation or misdeclaration of petroleum products.

As of May 13, 2021, 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 in September 4, 2019.

Of the total amount, BOC accounted for P201.58 billion of the tax haul, while BIR collected another P27.92 billion.

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