Subic oil firm owes gov’t P4.2 B in taxes

SUBIC BAY FREEPORT – A special audit team of the Bureau of Customs (BoC) and the Subic Bay Metropolitan Authority has found an oil trading company in the freeport to be liable for more than P4.2 billion for discrepancies in its reports of imported oil products that passed through Subic from 2004 to 2006.

The audit team, which was created by a mission order issued by the Customs commissioner on Nov. 23 last year, identified the erring company as the PTT Philippines Trading Corp. (PTTTC), formerly known as Subic Bay Fuels Co., Inc. (SBFCI).

The report from the auditors showed that the firm is “liable to pay the assessed customs duties, value added tax, and penalties in the amount of P4,236,530,193” for some  60,590,007 liters of petroleum products that are still unaccounted for.

The amount is broken down as follows: P967,050,000 for kerosene excise deficiencies; P199,169,289 for gain/loss beginning inventory  deficiencies; and P3,070,310,904 for deficiencies in ending inventories.

The report, which is an initial evaluation of the audit being undertaken by the joint BoC-SBMA team, said the PTTTC misdeclared jet fuel as ordinary kerosene, and that its liquidation reports showed beginning and ending inventories for several petroleum products contained discrepancies resulting in accounting errors of the goods per physical inventory.

The firm was also found to have committed discrepancies in ending inventories per liquidation report submitted to the BoC-SBMA Joint Audit Team against the ending inventories submitted to the Bureau of Internal Revenue.

The discrepancies in reported ending inventories for 2005 were: 24,995,105.44 liters of diesel, 668,901.65 liters of fuel oil, 507,017 liters of unleaded gasoline and 17,512,295.75 liters of JetA1 fuel. For 2006, there were 3,080,318.85 liters of fuel oil, 1,566,173.57 liters of JetA1 fuel; and 12,260,195.07 of unleaded gasoline.

The PTTTC misdeclared jet fuel as ordinary kerosene when it imported 100,000 barrels of kerosene and 68,000 barrels of JetA1 fuel in January 2004, and again in March 2005 when it brought in 48,936 barrels of JetA1 and 48,936 barrels of kerosene.

PTTTC reportedly declared separate amounts for the two petroleum products in the inward customs manifest and the declarations filed with the SBMA.

“However, the certificates of quantity attached to the declarations reveal that both products are commingled in the same tanks. Purchase order for the products show that there is no difference in the treatment between the said products,” the audit report said.