DOF acts to curb smuggling of kerosene products

MANILA, Philippines - The Department of Finance (DOF) will include kerosene products in its coverage of a fuel-marking program even if the corresponding duties have already been paid. The fuel marking program is part of government efforts to curb smuggling.

According to Department Order 18-2010, the mandatory coverage would help prevent revenue leakages, resulting from the processing of kerosene products entering the country.

The order shall cover all kerosene importations, the DOF order said.

 “The coverage of the fuel marking program is expanded to include all kerosene products and dual purpose kerosene shipments into the country even if the corresponding duties and taxes thereon have been paid,” the DOF said.

As such, the DOF said the Program Implementation Office has been directed to ensure that the mandatory marking of kerosene including DPK is implemented by the Bureau of Customs in all ports nationwide.

The department also wants to ensure that “the necessary technical, operational and administrative structures are in place for the smooth implementation thereof, including is proper dissemination to all parties and offices concerned.

Last February, the government went full-blast with its fuel-marking project, which involves the use of a liquid chemical substance for marking imported diesel and kerosene that enter the country duty-free.

The government is losing as much as P9.5 billion in potential revenues every year due to rampant smuggling of petroleum products into the country, BOC estimates showed.

Of the amount, P7 billion account for excise tax payments and P2.5 billion for import duties.

Before going full-blast with the project, the government did several pilot tests at the Ports of Subic and Clark last year.

The government hopes to shore up revenues to plug a widening budget gap which is expected to now hit roughly P300 billion for the year from a previous assumption of P293 billion.

In the first five months, the budget gap has widened to P162.1 billion or above the budget gap recorded in the same period last year of P123.2 billion and the first half deficit target of P145 billion.