THE government’s fuel marking program continued to yield higher marked volumes and tax collections as of end-September, but volatile oil prices and a weaker peso could sap revenue performance.
Latest data obtained by BusinessMirror showed the Bureau of Customs (BOC) collected a total of P185.284 billion in import duties and other taxes under the fuel marking program from January to September this year.
The amount is up by 1.84 percent from the P181.921 billion raised during the same period a year ago.
Diesel contributed the largest share at P93.592 billion as it remained the most marked fuel at 8.984 billion liters. The revenue collected, however, was down by 0.33 percent despite the increased marked fuel during the nine-month period from P93.908 billion a year ago.
Customs Assistant Commissioner Vincent Philip C. Maronilla told the BusinessMirror that stricter anti-smuggling measures resulted in the growth in revenue collections.
With legitimate fuel companies coordinating with the BOC and sharing intel on suspected abusers, Maronilla said importers were forced to declare correct volumes and pay the proper taxes.
However, oil price fluctuations have a ‘big impact’ on its tax collections since 35 percent of the BOC’s revenue share comes from oil importations.
The sudden depreciation of the peso also affects the bureau’s collections, as duties are influenced by foreign exchange valuations upon fuel importation, Maronilla added.
‘So, if the exchange rate is lower when the payment comes here, our collection will also go down,’ the Customs official told the BusinessMirror.
To enhance integrity in the marking system, Maronilla said the BOC will be revising the program next year by engaging a new service provider.
He added that improvements will focus on more consistent, science-based testing, particularly addressing homogeneity concerns when marked fuels mix with additives.
‘We’re looking into improving our collection efficiency and maybe, towards the end of the year, we’ll see the volumes increase,’ Maronilla added.
The fuel marking program was implemented on September 4, 2019, as part of the Tax Reform for Acceleration and Inclusion (Train) law, aimed at ensuring oil products available in the market comply with tax regulations.
Based on the law, petroleum products that are refined, manufactured, or imported to the Philippines, such as unleaded premium gasoline, kerosene and diesel, must be marked by an official marking agent after taxes and duties have been paid.
A unique chemical marker is used in marking fuel that can be embedded at a molecular level in petroleum products-gasoline, diesel and kerosene-enabling authorities to test, identify and distinguish petroleum products with paid excise taxes.