In the first five years of its implementation, fuel marking added to government coffers a total of P988.8 billion in tax revenues, inching closer to the P1-trillion mark with one more year before the program's contract ends.
The latest data obtained by Manila Bulletin on Tuesday, Sept. 17, showed that from September 2019 to Sept. 13, 2024, a cumulative 85.9 billion liters (L) of oil had been marked or injected with a chemical marker signifying correct payments of import duties and other taxes.
The annual volume of marked fuel has been on an upward trend—12.1 billion L in the first year of implementation; 17.1 billion L in the second year; 18 billion L in the third year; 18.6 billion L in the fourth year; and 20.1 billion L in the fifth year.
Alongside rising yearly volumes were increasing tax collections from fuel marking -- P126.5 billion in year one; P158.4 billion in year two; P223.2 billion in year three; P234.5 billion in year four; and P246.2 billion in year five.
The Bureau of Customs (BOC), which leads the marking of imported fuel products, collected the bulk or P959 billion in duties from tax-paid oil during the last five years. The Philippines is a net oil importer.
The Bureau of Internal Revenue (BIR), meanwhile, contributed P29.8 billion in excise taxes from 2019 to 2021, generated from domestic refiners that eventually downscaled or stopped their operations at the height of the COVID-19 pandemic.
Customs Deputy Commissioner Teddy Sandy S. Raval, who heads the BOC's enforcement group and oversees fuel marking, pointed to the program's success in raising more revenues for the government.
"We were able to capture more volume declarations which eventually translated to more taxes. And more oil players were forced to surface and go legit," Raval told Manila Bulletin.
At present, 36 companies are participating in the fuel marking program. Leading the companies in terms of volumes marked were Petron, Shell, Unioil, Insular Oil, Seaoil, Chevron, Filoil, Jetti, Phoenix and Marubeni.
Diesel accounted for almost three-fifths of marked fuel nationwide during the past five years; gasoline, two-fifths of total; and kerosene, 0.4 percent.
The BOC nonetheless remains on-guard against unscrupulous traders that still try to evade tax payments. The country's second biggest revenue agency, for instance, early this month shut down a gas station in Valenzuela City that sold unmarked fuel.
The government's contract with the joint venture of SGS Philippines Inc. and Switzerland-based SICPA SA, which produces the marker and undertakes actual marking of taxable oil products, covers a total volume of 119 billion liters. Raval said this targeted fuel marking volume may be reached by December 2025, at the earliest.
Despite some delays, implementation of the fuel marking program began in September 2019, as mandated under the Tax Reform for Acceleration and Inclusion (TRAIN) Law, which took effect in 2018.
Government estimates in 2016 had shown that the foregone tax revenues reached P26.9 billion annually, no thanks to prevalent oil smuggling and misdeclaration back then.
Separate calculations of the Manila-based Asian Development Bank (ADB) and of domestic oil industry players had pegged bigger yearly revenue losses from oil, amounting to P37.5 billion and P43.8 billion, respectively, before fuel marking took effect.
Duties and other taxes collected from petroleum products usually accounted for about two-fifths of the BOC's annual collections.