Palace to Shell: Accept tax deal

MANILA, Philippines - Malacañang has urged Pilipinas Shell Petroleum Corp. to accept the compromise proposed by the Department of Finance (DOF) to resolve its row with the Bureau of Customs (BOC) on the issue of its supposed arrears of P7.3 billion in back taxes in order to ensure the continuity of its operations.

Deputy presidential spokesman Ricardo Saludo, in an interview over Radyo ng Bayan, said that Shell and DOF officials had discussed the issue and it was up to the oil firm to act on the proposed compromise agreement.

The compromise involves having Shell set aside the P7.3 billion in an escrow account while the case is being heard by the courts.

If Shell wins the case, then the money would promptly revert to them.

“It is important that our compromise with Shell moves forward. If the money is set aside, then Shell can continue importing and our oil supply would not be affected,” Saludo said.

Shell has stated that it has stopped all of its importations after failing to secure an extension of a temporary restraining order from the courts to stop the BOC from seizing its imports.

The BOC is intent on seizing all of the imports of Shell to cover the P7.3 billion in excise taxes that the oil firm supposedly owes the government.

According to BOC, Shell’s importation of catalytic crack gasoline was not exempted from the excise tax because these were considered as finished unleaded gasoline.

But Shell contested this claim, saying that the imports were raw materials for the production of unleaded gasoline and thus were exempted from the excise tax.