Finance Sec. Carlos Dominguez said authorities expect smuggling of oil products to increase following the implementation of the Tax Reform for Acceleration and Inclusion Law lastyear.
Under Republic Act 10963, otherwise known as TRAIN Law, excise tax on diesel and bunker fuel will be P2.50 per liter in 2018, P4.50 this year and P6 in 2020.
Excise tax on gasoline increased from P4.35 per liter to P7 in 2018 andHP9 this year. In 2020, the excise tax on gasoline would be P10 per liter.
Dominguez said the anticipated increase in oil smuggling as a result of the excise tax hike is the reason behind the fuel marking program, which would be implemented late this year.
“Fuel marking is designed to help address this issue,” he said.
The DoF chief explained that following the announcement of the fuel marking program's implementation “we noted a steady increase in collections among the ports where petroleum products are regularly imported”.
“This is a strong indicator of increased compliance. Those who skirted required declarations and payment of taxes in the past are now following the law,” he added.
Earlier, Dominguez said at least 95 percent of all oil marking sites would be operational by end 2019 and the program is expected to increase government revenues by at least P5 billion this year.
The government awarded the fuel-marking contract to Switzerland-based security ink technology provider Société Industrielle et Commerciale de Produits Alimentaires.
Under the plan, the government is to pay the P0.6884 per liter fuel marking fee for the first year of implementation while oil companies would pay for the second to fifth year of implementation.
The fuel marking fee is on top of the duties and taxes to be collected from the oil companies by the BIR and the BoC. Rela