DOE ready to assist Customs in tax case vs Pilipinas Shell

MANILA, Philippines - The Department of Energy (DOE) said it is ready to assist the Bureau of Customs (BOC) in its tax issue against Pilipinas Shell Petroleum Corp.

“If we are called in, we will assist. We will get involved if they call on us or want us to participate in the discussions,” Energy Secretary Jose Rene Almendras said.

But Almendras was also quick to point out that the DOE will remain on its “hands-off” position on the tax case unless the BOC seeks its assistance.

“It is a tax claim from BOC. It’s not DOE’s jurisdiction. It’s a tax issue,” he pointed out. “There is a case already filed in court so its subjudice to make any statement.”

The energy chief, however, pointed out that the parties involved in the case are already trying to resolve it.

“I believe they (BOC and Shell) have to discuss this, there are some documentations that need to be discussed,” he added.

Shell, in a statement released over the weekend, categorically denied it had shortchanged the government in terms of paying the right taxes.

The oil company said it did not defraud the government by not paying excise and value-added taxes (VAT) for import shipments of catalytic cracked gasoline (CCG) or light catalytic cracked gasoline (LCCG), which Shell allegedly “misclassified” as tetra-propylene for the period 2005 -2009.

CCG or LCCG are blending components used to produce Clean Air Act-compliant unleaded gasoline.

As there is no specific Customs classification code for CCG/LCCG under the Tariff and Customs Code of the Philippines, Shell said it used a comparable product tariff heading (tetra-propylene) but the tariff description clearly states that the product was CCG/LCCG.

More importantly, this classification passed through the process of assessment, review and approval by the BOC, it added.

Shell maintained that it has paid all the right taxes and strongly denied having engaged in any fraudulent activity, especially smuggling.

Shell has consistently been in the government’s top 10 taxpayers list as over the last five years, its annual tax payments averaged about P26 billion.

The issue surrounding the alleged non-payment of excise taxes on its 2005-2009 shipments is already the subject of a pending case between Shell and Customs at the Court of Tax Appeals.