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Implementation of fuel marking system under TRAIN Law needed

CEBU CITY, Philippines – A gas station personnel attends to a customer in Cebu City, 6 Oct 2018. Senate Committee on Energy chair Senator Win Gatchalian is urging the government to speed up the implementation of control mechanisms such as the fuel marking scheme that would plug revenue leakages under the TRAIN Law. Photo by Mark Cayabyab/OS WIN GATCHALIAN

Senator Win Gatchalian is urging the government to speed up the implementation of the fuel marking scheme under the TRAIN Law (Republic Act No. 10963) to plug revenue leakages such as oil smuggling.

After leading the Senate Committee on Economic Affairs in an inquiry on the potential impact of the proposed suspension of the second tranche of the fuel excise tax hike, Gatchalian expressed concerns that the Department of Finance (DOF) missed its revenue collection target on excise taxes, including petroleum excise tax collections.

DOF data shows that the government missed its excise tax target of ₱69.5 billion by ₱13.7 billion from January to June 2018, collecting only ₱55.8 billion. Petroleum excise tax collections reached ₱20.9 billion, which amounts to only two-thirds of the ₱30.8 billion target.

Gatchalian pointed out that the shortfall in revenue collection could have been prevented if the fuel marking system has been implemented by now. “Para sa akin, yung mga targets na inilatag ng DOF ay importante. Kapag hindi mo na-meet iyong target, iyong mga ipinangakong programa ay hindi rin natin maibibigay. Nalaman din natin na iyong mga control mechanisms, gaya ng fuel marking, ay hindi pa din nai-implement,” he said.

“The reason why I find it disturbing is that after the successive public hearings on the TRAIN Law, we were all quite wary about the possible incidents of smuggling. When I looked at these figures and saw that the excise tax for petroleum was not hitting the target, my first instinct was that a lot of petroleum products had been smuggled into the country,” he added.

For this reason, Gatchalian called on the government to immediately implement a fuel marking system to deter revenue leakages.

“We’re not hitting the target and there’s probably some loopholes along the way. We want to emphasize that we need to implement these controls so that smugglers will not operate, and misdeclaration will not happen,” Gatchalian said.

“Again, we owe it to our citizens because we raised the taxes and we need to collect that in order to give it back to them in terms of services,” he added.