The Department of Finance (DOF) expects to collect P20 billion in revenues in 2020 with the full implementation of the fuel marking system next year.
DOF undersecretary Antonette Tionko, during a Senate hearing September 25 on the department’s budget for 2020, said the fuel marking program, already in its initial phase of implementation, is expected to be fully implemented by January 2020.
“We’re hoping to collect at least, by next year, P20 billion, which is half of the estimated amount of the smuggled revenue,” Tionko said.
The Petroleum Institute of the Philippines, which supports the program, earlier said that prior to the passage of the Tax Reform for Acceleration and Inclusion (TRAIN) Act, which mandates fuel marking, around P40 billion in government revenue was being lost to petroleum smuggling, a figure it said was validated by various independent studies.
Tionko said the team implementing the program is “in the process of working with the big refineries for installation of the automatic injection of the marker.”
“In the meantime, the marking is done manually now because, for the big refineries, it will have to be through their equipment and it’s automatically injected because of the volumes,” Tionko said.
Marking of fuel products, whether imported or manufactured in the Philippines, becomes mandatory five years after the TRAIN law took effect January 2018.
Formally launched last February, the program also includes random field testing and confirmatory tests of the fuel required to be marked so as to check for compliance.
Joint Circular (JC) No. 01-2019, signed last July, executes the mandatory marking—after the taxes and duties have been paid—of refined, manufactured, or imported gasoline, diesel and kerosene in the Philippines, including those withdrawn from Free Zones to be introduced into the country.
According to JC 01-2019, the Bureau of Customs (BOC) and Bureau of Internal Revenue (BIR) will implement the program, including collecting of the marking fees.
Under the National Internal Revenue Code, as amended, BIR shall collect the fuel marking fees for locally refined or manufactured petroleum, while BOC shall do this for imported petroleum products.
All costs from procuring the official fuel markers shall be borne by the refiner, manufacturer, or importer of petroleum products. The government may subsidize the cost of official fuel markers in the first year of implementation.
Last August, DOF, BOC, and BIR conducted the first live marking of petroleum products at the Seaoil Bulk Terminal in Mabini, Batangas, launching the implementation of the program in the Philippines.
Also in August, BOC issued Customs Memorandum Order No. 43-2019, which implements JC No. 01-2019.
Winning joint venture Swiss-based SICPA SA and SGS Philippines is the fuel marking provider.