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A joint Bureau of Customs-Bureau of Internal Revenue (BoC-BIR) team will begin this month field testing enforcement activities on all petroleum products to determine compliance with the law-mandated fuel marking program (FMP).
Customs Commissioner Rey Leonardo Guerrero disclosed on Friday that beginning on April 26, 2021, the joint BoC-BIR team would start its inspection of gasoline, diesel and kerosene found inside warehouses, storage tanks, gas stations, other retail outlets and in such other properties.
Also covered by the enforcement activities are vessels, tank trucks and similar fuel transporting vehicles.
The fuel marking is required on all petroleum products that are refined, manufactured or imported into the Philippines that are subject to the payment of duties and taxes such as but not limited to gasoline, denatured alcohol used for motive power, kerosene and diesel fuel oil after the taxes and duties have been paid.
The system will also monitor all locally-refined finished oil products to ensure correct payment of corresponding excise taxes and value added tax or VAT.
Guerrero explained that the inspection team would determine if the petroleum products stored in said facilities contain the right fuel marker level.
Under the Tax Reform for Acceleration and Inclusion or Train Act, petroleum products found without the official fuel marker or not containing the required level of the official fuel marker are subject to payment of duties and taxes, as well as appropriate fines and penalties.
However, said payment is without prejudice to the confiscation and forfeiture of such unmarked or diluted fuel and the filing of the appropriate criminal case.
According to Guerrero, the field-testing process would be done using mobile laboratory units equipped with analyzers capable of detecting the official fuel marker’s presence in any fuel sample.
He explained that the test result would be generated on-site and would indicate a pass or fail result, adding that products with failed results would be subjected to confirmatory testing in the fuel testing facility.
“For purposes of transparency, the owner of the fuel or his representative will be allowed to witness the field and confirmatory testing,” he further said.
BoC and BIR had earlier begun the transitory field-testing activities. Under the transitory field testing, sample fuels from retail stations and tank trucks in the National Capital Region and nearby provinces were tested to determine the marker levels in the fuel supply available in the domestic market.
The activity is in line with Section 13 of the Department of Finance-BoC- BIR Joint Circular 001.2021, which prescribes the implementing guidelines for field testing under the FMP.
The FMP aims to raise revenues while curbing fuel smuggling and leveling the oil industry’s playing field.
Since its implementation in September 2019 to December 2020, the BoC and BIR marked a total of 17.55 billion liters of fuel and have collected P171.72 billion in duties and taxes under the program.
For the first quarter of 2021, a total of 4.1 billion liters of kerosene, diesel and gasoline have been marked. It enabled the BoC to collect P35.84 billion duties and taxes.