DBM to award fuel marking contract

MANILA, Philippines — The Department of Budget and Management’s Procurement Service (DBM-PS) is set to award this month the contract for the establishment of a fuel marking system, a budget official said yesterday.

During a joint hearing conducted by the Senate Committee on Economic Affairs and Ways and Means, DBM Assistant Secretary Rolando Toledo said the government is ready to award its fuel marking contract to the joint venture between SGS Philippines Inc. and SICPA SA.

The joint venture was the sole bidder for the fuel marking program.

“I just talked to our PS director that we’re ready to award the winning bidder for the fuel marking. So we can implement fuel marking soon,” Toledo told Sen. Sherwin Gatchalian, committee chairman.

In an interview after the hearing, Toledo said the contract would be ready for awarding this week.

With the successful procurement for the services of a fuel marking provider, Toledo said the government would be ready to implement by next year its fuel marking scheme, a move seen to prevent oil smuggling in the country.

The establishment of a fuel marking system is part of the provisions of the Tax Reform for Acceleration and Inclusion (TRAIN) Law.

The Department of Finance (DOF) earlier said fuel marking is expected to plug as much as P44 billion in revenue lost annually due oil smuggling.

However, the DOF said the delay in the implementation of the program has caused the reduction in the expected government revenue for the year.

Finance Undersecretary Karl Kendrick Chua said during the hearing that this, together with the delay in the electronic receipt system, has slashed the expected revenues from TRAIN by P26.6 billion.

“Of the P89.9 billion, P26.6 billion has been deducted by the DBCC (Development Budget Coordination Committee) because the e-invoice and fuel marking is not yet ready. So the balance is P63.3 billion,” Chua said.

As a result, the Development Budget Coordination Committee (DBCC) has cut the national government’s 2018 revenue program to P2.82 trillion from the previous target of P2.846 trillion.

In the first half, Chua said the government generated P33.7 billion in net revenue from the implementation of TRAIN.

“Since we collected P33.7 billion out of the P63.3 billion, we are on the dot as of the first half,” he said.

Broken down, DOF data showed that P55.8 billion of TRAIN collections came in the form of excise tax, which is compose of petroleum excise (P20.9 billion), automobile excise (P9.5 billion), sugar sweetened beverages excise (P18.5 billion), tobacco excise (P5.5 billion), coal excise (P400 million), and mining excise (P900 million).

Another P300 million was collected as value-added tax, while the remaining P29.1 billion was in the form of other taxes.

However, the reduction in personal income taxes also reduced the government’s revenues by P51.5 billion, resulting in a net gain of P33.7 billion.