Implement fuel marking scheme to plug revenue leakages, Gatchalian urges govt

Published November 6, 2018, 7:04 PM

by Roel Tibay

By Mario Casayuran

Senator Sherwin T. Gatchalian, chairman of the Senate economic affairs committee, urged yesterday the Duterte administration to hasten the implementation of the fuel marking scheme under the Tax Reform for Acceleration and Inclusion (TRAIN) Law (RA 10963) to plug revenue leakages such as oil smuggling.

Sen. Sherwin T. Gatchalian (Facebook / MANILA BULLETIN)
Sen. Sherwin T. Gatchalian

Gatchalian expressed concern that the Department of Finance (DoF) missed its tax revenue collection target, including petroleum excise collections.

He issued the statement after conducting an inquiry on the potential impact of the proposed suspension of the second tranche of the fuel tax increase.

Gatchalian cited DoF data showing that the government missed its tax target of P69.5 billion by P13.7 billion from January to June 2018, collecting only P55.8 billion. Petroleum tax collections reached P20.9 billion, which amounts to only two-thirds of the P30.8 billion target.

He pointed out that the shortfall in revenue collection could have been prevented if the fuel marking system was implemented.

“Para sa akin, yung mga targets na inilatag ng DOF ay importante. Kapag hindi mo na-meet iyong target, iyong mga ipinangakong programa ay hindi rin natin maibibigay. Nalaman din natin na iyong mga control mechanisms, gaya ng fuel marking, ay hindi pa din nai-implement,” he said. (To me, the targets laid down by the DOF are important. When you cannot meet your targets, you cannot deliver the promises you made. We also learned that the control mechanisms such as fuel marking have not been implemented.)

Plug loopholes

“The reason why I find it disturbing is that after the successive public hearings on the TRAIN Law, we were all quite wary about the possible incidents of smuggling. When I looked at these figures and saw that the excise tax for petroleum was not hitting the target, my first instinct was that a lot of petroleum products had been smuggled into the country,” he explained.

For this reason, Gatchalian called on the government to immediately implement a fuel marking system to deter revenue leakages.

“We’re not hitting the target and there’s probably some loopholes along the way. We want to emphasize that we need to implement these controls so that smugglers will not operate, and misdeclaration will not happen,” Gatchalian said.

“Again, we owe it to our citizens because we raised the taxes and we need to collect that in order to give it back to them in terms of services,” he added.