Gov’t to spend R2 B to fight R30 B yearly oil tax smuggling loss

The government has set aside R2 billion to fund its fuel marking project in a bid at stopping the smuggling of gasoline and other petroleum products which has been causing the government to lose up to R30 billion yearly in excise and value-added taxes.

The money will be used to purchase electronic gadgets, chemical additives, vehicles and hiring of additional manpower.

The Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) will jointly implement the project starting in January next year.

BIR Deputy Commissioner for Operations Arnel Guballa said the scheme basically consist of pouring molecular elements by BOC personnel on oil products passing through the custom zones.

The chemical produces certain coloration not visible to the naked eye, but the special computer machines can easily detect if oil products pass through proper channel and required taxes paid.

For its part, the BIR will conduct surprise inspection of all gas stations in Metro Manila and elsewhere to test their supplies with the use of electronic devises installed in vehicles.

Guballa said the electronic gadgets are also capable of testing the integrity or quality of petroleum products, hence protecting car engines from corrosion.

It is a common knowledge that unscrupulous gas station owners adulterate their supplies with other gas substances like diesel or kerosene to maximize their profits.

Guballa said petroleum smuggling is a worldwide problem.

He said the untaxed oils in South East Asia come mostly from Malaysia where prices are cheap due to government subsidy similar to the erstwhile Oil Price Stabilization Fund of former President Marcos.