Government to pursue case against Pilipinas Shell

MANILA, Philippines - The Aquino administration is determined to pursue the case against Pilipinas Shell Petroleum Corp. even as businesses warned that the move may drive away investors. 

In an interview, Customs Commissioner Angelito Alvarez believes that businesses have nothing to fear for as long as they abide by existing laws. 

“I don’t think this would drive away investors. Businesses are aware that we are implementing the laws so we can help the economy,” Alvarez said.

Shell is a multinational company that has operations worldwide.

Last month, the Bureau of Customs filed before the Department of Justice a technical smuggling case against Shell. The case stemmed from alleged misclassification and misdeclaration by Shell of oil importations from 2005 to 2009.

The previous administration has been prompting Shell to pay its alleged tax obligations but Shell continuously refutes the claims of the government.

According to Customs data, Shell incurred a P2.3-billion misclassification case and a P380-milllion misdeclaration case. The biggest amount of P21.7 billion comprises an 800-percent surcharge.

As such, the total amount is P24 billion, according to Customs.

 Shell is insisting that its importations comprised of catalytic cracked gasoline (CCG) and light CCG which are not subject to duties. 

However, the BOC said that the supporting documents showed that the imported goods were finished products which are subject to duties.

“In truth, the corresponding invoices issued by Shell International Eastern Trading Co. (SIETC) as well as the documents provided by the shipping companies described those shipments as containing unleaded premium gasoline,” Alvarez said.

The case filed against Shell by the current administration is separate from the P7.3-billion tax collection case between the two parties which remains pending at the Court of Tax Appeals, Alvarez said.

Alvarez said the government has lost P20 billion to P30 billion last year in oil smuggling.

Alvarez also said that Shell was previously paying excise taxes on its unleaded gas importations. However, in 2004, it was able to secure a ruling from former BIR Deputy Commissioner Jose Mario Buñag exempting Shell from paying said excise taxes. Buñag’s ruling was affirmed by former BIR Commissioner Sixto Esquivias IV but this was later reversed by Esquivas’ successor, former BIR chief Joel Tan-Torres.