Home » Breaking News, Customs & Trade, Ports/Terminals » Oil firms to pay fuel marking fees from Sept 4

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From September 4, 2020, the Bureau of Customs (BOC) and Bureau of Internal Revenue (BIR) will start collecting from oil companies a fuel marking fee for all manufactured, refined and imported petroleum products.

During the first year of implementation of the fuel marking program, which began in August 2019, the cost of fuel marking was paid by government.

Under implementing guidelines of Joint Memorandum Order (JMO) No. 1-2020, the fuel marking fee as well as the internal revenue taxes must be paid by the importer or refiner prior to marking activities.

The JMO—dated August 28 and signed by Finance Secretary Carlos Dominguez III, Customs Commissioner Rey Leonardo Guerrero and Internal Revenue Commissioner Caesar Dulay—covers collection of fuel marking fees for the second to the fifth year of implementation of the fuel marking program.

Marking of fuel products—using an official marker provided by the fuel marking service provider—becomes mandatory five years after the Tax Reform for Acceleration and Inclusion (TRAIN) law took effect on January 2018.

Under TRAIN, all costs pertaining to procurement of official fuel markers should be borne by the refiner, manufacturer or importer of petroleum products, but the government may subsidize the cost of official fuel markers during the program’s first year of implementation.

BOC will collect the fuel marking fee on imported petroleum, and BIR the fuel marking fee for locally refined or manufactured petroleum product.

Under JMO 1-2020, the refiner, manufacturer or importer of petroleum products pays for marking services of the fuel marking provider. The fee will be computed based on the agreed contract price of P0.06884 (value-added tax inclusive), multiplied by the actual liter of fuel marked.

The joint venture of Swiss-based SICPA SA and locally based SGS Philippines, Inc. has won the contract to provide a fuel marking program for the BOC.

READ: JV of SICPA and SGS secure BOC’s fuel marking project

The JMO also provides for disbursement of the Fuel Marking Trust Account, a trust liability account created for implementation of the fuel marking program. Under the order, the fuel marking fee will be a non-revenue collection recorded as trust receipts and credited to the Fuel Marking Trust Account to be maintained by the Bureau of Treasury.

BOC is responsible for paying the fuel marking provider for services rendered.

According to the Department of Finance, the government has already marked a total of 10.66 billion liters of oil products and generated P91.7 billion in import duties from implementation of its fuel marking program from September 2019 to July 2020.

Fuel marking aims to curb oil smuggling and plug revenue losses arising from the illegal importation or misdeclaration of petroleum products. – Roumina Pablo

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