Oil smuggling rises since tax reform law
THE FEDERATION of Philippine Industries claimed that the country’s revenue losses due to oil smuggling have increased by about 30 per cent since higher excise taxes were slapped on the product.
FPI said the government should heighten efforts to combat smuggling, which continues to cost the country billions of pesos in foregone revenue driven mostly by leakages in the oil sector.
The group compared the estimated revenue loss before and after the first tax reform package got implemented starting from January last year.
The Tax Reform for Acceleration and Inclusion (TRAIN) Act lowered the personal income tax while raising consumption taxes.
The law, which has contributed to last year’s inflation, has been tagged by critics as anti-poor, especially since minimum wage earners will not benefit from lower personal income tax since they are exempted from the tax in the first place.
“Prior to TRAIN, we were losing an estimated P40 billion in revenue to oil smuggling,” said FPI chair Jesus Arranza.
“But with the implementation of additional excise taxes beginning 2018, we expect this number to have increased by about 30 per cent. This is why anti-smuggling efforts should be enhanced and be more targeted especially at the import terminals,” he noted.
He said that the Department of Energy should pay closer attention to importers to check on possible mis-declaration and under-declaration of oil products.