MANILA, Philippines - A congresswoman today accused Pilipinas Shell of "unabated smuggling activities" and tax evasion.
Zambales Rep. Maria Milagros Magsaysay made the accusation as she urged the House of Representatives' committee on ways and means to investigate the oil company.
In the House Resolution 1643, Magsaysay said that the committee should also probe officials of the Bureau of Customs (BOC) and the Bureau of Internal Revenue (BIR) for their alleged failure to "take action and necessary steps to run after Pilipinas Shell."
"The House Committee on Ways and Means should immediately conduct an investigation in aid of legislation to ferret out the truth and determine the culpability of the culprits," said Magsaysay.
According to Magsaysay, Pilipinas Shell started declaring in 2004 its shipments of Catalyctic Cracked Gasoline (CCCG) and Light Catalyctic Cracked Gasoline (LCCG) that arrived at the Port of Batangas as blending components, which the BOC disagreed to. She said that the bureau had found out that the shipments were not blending components, but rather final products and therefore liable for payment of excise taxes and value added taxes on excise taxes.
She said that the oil company contested the BOC findings and got a reprieve from a BIR Memorandum issued by Deputy Commissioner Jose Mario Bunag stating that indeed CCCG and LCCCG are blending components.
The BOC did not agree to the BIR Memorandum, and on Nov. 11, 2009, an eight-member Verification Committee of the BOC found Pilipinas Shell to have committed fraud and was therefore liable to pay taxes in the amount of P7,348,767,933.00.
Magsaysay said that in a separate issuance, acting BIR Commissioner Joel Tan Torres reversed Bunag's position and found that CCCG and LCCG are not blending components and therefore Shell is liable to pay the taxes of P7 billion.
However, the Court of Tax Appeals issued an order enjoining the commissioners of the BOC and the BIR and its agents to refrain collecting taxes from Pilipinas Shell by using as basis the company’s very minimal surety bond, and the interference from then Solicitor-General Alberto Agra and purportedly from Malacañang through "a certain Secretary Favila."
The congresswoman said that despite the very clear case against Shell for smuggling and non-payment of taxes, there is great injustice to the government by the solicitor-generla for its inaction of not pursuing a winning case against Shell at the Court of Tax Appeals.
Magsaysay also alleged that Shell continued its "smuggling activity" from the period July 2010 to April 2011 and imported shipments declared as alkylate, which were found by the BOC at the Port of Batangas as misdeclared.
After subjected to thorough tests and evaluation, a composite team of officials at the Port of Batangas found the alkylate as motor gasoline and therefore subject to the imposition of excise taxes and VAT on excise taxes in the amount of P1,578,269,755.00.
After the findings of misdeclaration and smuggling by Shell of motor gasoline declared to be alkylate, the Collector of the Port of Batangas Juan Tan, immediately sent a memorandum to incumbent BOC Commissioner Angelito Alvarez to demand payment from Shell of the taxes due plus the penalties and interests and surcharges, and to file a criminal case.
Magsaysay said that Alvarez refused to take action, and instead relieved Tan and the other Port of Batangas officials "under questionable and mysterious reasons."
Magsaysay said the government stands to lose several billions of pesos in uncollected taxes, and these indicate that certain government officials may have given undue advantage to smugglers.
"It is imperative for the House to conduct an inquiry on these issues that involved transcendental importance," she said.