First year of fuel marking yields P131 B

The government’s fuel marking program has covered over 12 billion liters of petroleum products during its first-year of implementation, the Department of Finance (DOF) said.

In a statement, Finance Undersecretary Antonette C. Tionko said the total volume of fuel marked from September 4 last year to September 17, 2020 totaled 12.71 billion liters, equivalent to P131.17 billion in taxes and duties.

The Bureau of Customs collected P112.35 billion from fuel markings in that one-year period, while the Bureau of Internal Revenue (BIR) raised P18.82 billion in taxes from December last year to September 10.

Finance Secretary Carlos Dominguez III lauded the Revenue Operations Group (ROG) of the DOF along with Customs and the BIR for the successful implementation of a “full-fledged” fuel marking program.

“Congratulations to ROG, BIR and Customs on this fuel marking program,” Dominguez said. “You have implemented it and are already coming on your second year. So congratulations.”

The cost of the fuel marking program’s first year of implementation was shouldered by the government, but beginning last September 4, oil companies have been paying for the  fuel marking fees.

From the second year to the fifth year of implementation, oil companies are required under the fuel marking program to pay P0.06884, inclusive of value-added tax, per liter of fuel marked.

Fuel marking is mandated under the Tax Reform for Acceleration and Inclusion Act (TRAIN) as a measure against the smuggling of petroleum products.

Fuel marking is done after the taxes are paid on refined and imported gasoline, diesel and kerosene.

In August, the DOF, Customs and BIR issued Joint Memorandum Order No. 1-2020 prescribing the implementing guidelines for the collection and disbursement of the marking fees from the second- to the fifth-year implementation of the fuel marking program. 

Under the joint order, Customs shall collect the fuel marking fees on imported petroleum product while the BIR shall collect the fees for locally refined or manufactured petroleum products. 

 “The BOC and BIR shall commence collection of the Fuel Marking Fees on all manufactured, refined or imported petroleum products withdrawn and/or lodged beginning 4 September 2020,” the JMO stated.

It also stated that the “Fuel Marking Fee shall be characterized as non-revenue collection, recorded as trust receipts and credited to the Fuel Marking Trust Account to be maintained by the Bureau of the Treasury.”