Customs fuel tax collections flat in H1
Oil VAT down, excise tax up
At A Glance
- The Bureau of Customs collected P142.9 billion in value-added tax (VAT) and excise tax from oil between January and June, showing a marginal increase of 0.6% compared to the previous year.<br>Total VAT collections by customs on oil imports decreased by 7% from P65.7 billion to P61.2 billion at the end of June.<br>Excise tax collection during the same period rose by 7% to P81.7 billion from P76.3 billion in the previous year.<br>Taxes on petroleum products accounted for 32.97% of the Customs' collection in the first half of 2023.<br>Customs breached its revenue target in the first six months of 2023, achieving a collection of P434.17 billion, over 3% higher than the goal.<br>Despite a 2.8% decrease in importation volume for high-value commodities, revenue increased.<br>Revenue decline in the oil sector was due to decreasing global oil prices, dropping from $1.1 per liter in June 2022 to an average of $0.63 per liter this month.
Revenues from petroleum products showed no significant growth in the first half of the year, largely due to a decline in value-added tax (VAT) collection, the Development Budget Coordination Committee (DBCC) reported.
Based on the DBCC's 2023 mid-year report, the Bureau of Customs collected P142.9 billion in VAT and excise tax on oil from January to June, a marginal increase of only 0.6 percent compared to P142 billion in the same period last year.
Total VAT collections on oil imports decreased by seven percent at end-June from P65.7 billion to P61.2 billion.
In contrast, excise tax collection during the same period registered a seven percent increase to P81.7 billion from P76.3 billion the previous year.
The DBCC, an inter-agency body tasked to set the government’s macroeconomic assumptions, has attributed the slow growth in oil tax collections to the "lower oil prices in the world market."
Global oil prices dropped from $1.1 per liter in June 2022 to an average of $0.63 per liter this year.
Taxes levied on petroleum products constituted 32.97 percent of the Customs’ overall collection in the first half of 2023.
“The registration of Petron Bataan Refinery to the Authority of the Freeport of Bataan as a locator, which is considered to be outside of the customs territory, significantly contributed to the excise tax collections of the BOC as all our petroleum products are considered as imports,” the DBCC said.
The Bataan refinery, which is owned by the oil giant Petron Corp., stands as the last operating refinery in the country. It provides 40 percent of the local petroleum requirements, producing a daily output of 180,000 barrels.
In the first half of 2023, the Customs bureau reported surpassing its revenue target, despite a decrease in import volume.
The government's second-largest tax agency collected a total of P434.17 billion from January to June, exceeding the collection goal by over three percent.
Customs said its revenue haul grew despite the 2.8 percent decrease in importation volume for high-value commodities.
As a result of its anti-smuggling endeavors, the agency successfully confiscated shipments valued at P23.8 billion. The majority of these seized goods, totaling P15.54 billion, were comprised of counterfeit products.