Oil firms have 15 to 30 days of stocks
Oil companies were told by the Department of Energy (DOE) yesterday not to immediately collect the second round of excise taxes on petroleum products of 12 per liter on January 1, 2019 since they still have stocks or inventories of 15 to 30 days.
According to the Department of Energy, the industry players are first required to submit their inventory report by the end of this year, so
the agency could assess when they are warranted to pass-on higher excise taxes to the consumers.
Based on the second tranche of the Tax Reform for Acceleration and Inclusion (TRAIN) Act, excise taxes of gasoline and diesel prices are anticipated to go up by additional P2.00 per liter effective January 1, 2019; and additional P1.00 per kilogram for liquefied petroleum gas (LPG); and additional P1.00 per liter for kerosene products.
Upon the implementation of the second tranche excise taxes, gasoline will already be levied P9.00 per liter in excise tax; diesel will have excise tax of P4.50 per liter; kerosene with P4.00 per liter excise tax; and P2.00 per kg for LPG which is the cooking fuel of most Filipino homes.
The excise taxes impositions will be on top of the value added taxes (VAT) that are also imposed on per-liter-cost of petroleum products sold at the pumps.
DOE Assistant Director Rodela I. Romero said “the oil companies have until December 31, 2018 to submit their inventory reports.”
The deferment of excise tax hikes for the oil sector was similarly enforced last year – due to the oil firm’s remaining stocks prior to the effectivity of the tax reform law.
In fact, many of the industry players were able to stretch the non-pass on of excise taxes until end-February last year – providing interim relief to consumers as the first tranche was implemented when global oil prices had been on series of upswings.
A Revenue Regulations memo issued by the Bureau of Internal Revenue (BIR) similarly supported the
mandate of the DOE on the submission of oil inventories; that then underpins the non-immediate pass-on of higher excise taxes.
The tax agency stipulated that “concerned oil companies, owners, operators or lessees of storage depots, as well as producers and importers of denatured alcohol for motive/bioethanol fuel shall submit duly notarized inventories of all petroleum products and denatured alcohol as of midnight of December 31.”
The BIR further noted that the submitted inventories shall “be subjected to verification as required under existing regulations and issuances.”
It emphasized that “in case of failure to submit the required inventories by any of the aforesaid taxpayer, petroleum products found in his inventory prior to January 1, 2018; January 1, 2019 and January 1, 2020 shall be deemed subject to the new excise tax rates.”