DOF sees full implementation of fuel marking in Q1

MANILA, Philippines — The Department of Finance (DOF) is expecting revenue agencies to accomplish the full implementation of the fuel marking program within the first quarter to strengthen the government’s anti-smuggling efforts.

According to the DOF’s Revenue Operations Group (ROG),the full and nationwide roll out of the fuel marking program, including its field-testing component, is expected to be completed within the first quarter.

Under the fuel marking program, petroleum products for domestic consumption with proof of payment of taxes are injected with chemical markers.

It seeks to curb oil smuggling and misdeclaration of petroleum products, and to increase revenue collection from taxable imported and locally refined petroleum products.

Earlier, the Bureau of Customs (BOC) said its team, together with the Bureau of Internal Revenue (BIR) were gearing up for the implementation of the field testing phase of the program.

The random field tests will be done in retail stations, tank trucks, vessels, depots and warehouses nationwide to check the companies’ compliance with the fuel marking program.

As of Jan. 6, the volume of fuel marked under the program has already reached 17.73 billion liters.

This translated to P149.36 billion in tax and duty collections for the BOC since September 2019 until Jan. 4 this year. The BIR’s excise tax collections from oil products starting December 2019 until December 2020 also amounted to P23.94 billion.

Meanwhile, the DOF said it was also targeting to complete the electronic Tax Exemption System (TES) of the DOF’s Revenue Office (RO) by the first quarter to allow importers to register, file, and track their duty- and tax-exemption applications online.

In 2020, the RO processed 16,650 tax exemption applications, which translated to P12.5 billion in foregone revenues.

Finance Undersecretary Antonette Tionko  said these include 2,520 applications under the Bayanihan To Heal As One Act and the Bayanihan To Recover As One Act.

Tionko said the pilot launch of the BIR’s electronic invoicing system would also proceed as scheduled this year.

With assistance from the Korea International Cooperation Agency (KOICA), the government is now working on the value-added tax (VAT) system, installation of the infrastructure and the capacity building aspect of the project.

“The e-invoicing system we are developing is capable of processing and storing electronic invoices issued by taxpayers on near real-time. This will make it easy to issue digital receipts and capture and upload the data in the receipt to a centralized database,” she said.

This system also includes an e-sales reporting system capable of summarizing the data in electronic invoices and receipts stored in the database, she said.

Moreover, Tionko said the BIR was also targeting to launch its online registration and update system by August. The system will allow business and individual taxpayers to register or update their data online.

The DOF also aims to partially complete the digitalization of the One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center (OSS) within the first quarter.