THE Bureau of Internal Revenue (BIR) temporarily suspended the bond requirement for petroleum importers and producers, as the rule undergoes review for possible repeal by the Anti-Red Tape Authority (ARTA).
In a revenue regulation signed by Finance Secretary Ralph G. Recto and Internal Revenue Commissioner Romeo D. Lumagui Jr., importers and manufacturers of petroleum products subject to excise tax will not be required to post a bond.
The suspension will remain in effect while the ARTA reviews and provides recommendation on whether the bond requirement will be retained, amended or repealed. The review will determine whether the rule still provides value or if it only imposes undue burden on businesses.
It will also act as a ‘pilot implementation’ to assess the regulatory impact of removing the bond requirement.
To guard against potential abuses, importers must submit a monthly report to BIR and Bureau of Customs with details of imports, such as quantities, values and tax payments.
Importers must also still secure an ‘Authority to Release Imported Goods’ (Atrig) from BIR via the National Single Window system before the products are released. They must also be registered with the BIR and BOC and must have a record of good compliance with tax and customs rules.
‘Non-compliance with the foregoing conditions shall be subject to appropriate penalties under existing laws and regulations,’ the revenue regulation read.
Under Section 160 of the National Internal Revenue Code (NIRC) of 1997, importers and manufacturers of excisable goods must post a bond, based on how much excise taxes they paid in the previous year, every year after their initial operation.
However, the BIR said representatives from the petroleum industry and other stakeholders argue that posting bonds is no longer relevant or necessary since oil companies are required to pay the excise taxes upfront before their release from customs custody or withdrawal from a refinery.
The bond also adds extra cost for these companies and contradicts the government’s policy of promoting ease of doing business, the BIR noted.
Based on the law, government offices are required to undergo evaluation and improvement of their transaction systems and procedures, as well as reengineer the same if deemed necessary to reduce bureaucratic red tape and processing time.
The ARTA will coordinate with all government offices to review existing laws, executive issuances and local ordinances, and recommend the repeal of the same if deemed outdated, redundant and adding undue regulatory burden to the transacting public.