Philippines UpdateBasically a rehash of previous articles except for the targeted implementation date and the intend to implement it even if the tax reform proposal doesn’t pass.
Noteworthy ... The absence of SGS which supports earlier indications of some sort of fallout between SGS and Authentix.
Let the bidding begin ...
https://www.malaya.com.ph/business-news/business/fuel-marking-rolls-out-early-2018 Fuel marking rolls out early 2018 By ANGELA CELIS
May 24, 2017
The plan to adopt a fuel marking system as a way to prevent oil smuggling and complement efforts at improving the collection of fuel excise taxes will likely be implemented early next year, according to the Department of Finance (DOF).
Karl Kendrick Chua, DOF undersecretary, said on the sidelines of a forum yesterday the fuel marking scheme, included in the Lower House’s version of the tax reform proposal, will be bid out soon.
“Our original position is it doesn’t have to be in the law. If they want to put it into the law, it’s okay. But we are doing it anyway, whether it is in the law or not. It will be implemented early next year,” Chua said.
He said the cost per liter will depend on what the bidder will submit, but cited that during the pilot implementation of the scheme years ago, it was around nine centavos per liter.
“The proposal is, since it is only nine centavos per liter, it is easier if it is shouldered by the producers. So for a full tank, that is just P4,” Chua said.
“It’s a contribution they have to pay to ensure that they have the right fuel. Because if the fuel is smuggled and mixed with kerosene, it could damage cars, so it’s like an insurance they have to pay for themselves, to ensure that you will use the right one and the clean one,” he added.
In February, various groups backed the proposal for a fuel marking scheme, with officials of Dow Chemical, SICPA-Global Fluids International (SICPA-GFI), Authentix and United Color Manufacturing Inc. saying a fuel marking system is an economic, commercial, health, safety and environmental concern that should be institutionalized by the government to complement its proposal to adjust fuel excise tax rates.
Roberto Batongbakal, who represents Dow Chemical, told the ways and means panel early this year that on top of helping curb smuggling, fuel marking will also ensure that oil products sold in the market are of high quality, safe, highly regulated and comply with the country’s environmental laws.
“We recommend that the government develop a comprehensive fuel marking strategy for imported and locally produced fuel throughout the Philippines. We need to leverage best practices from governments that have successfully implemented fuel markings in their countries,” Batongbakal said.
Oil industry sources estimate that the government is losing $20 billion to $30 billion in revenues annually from oil smuggling.
“The government is not the only one losing revenues, but also legitimate fuel manufacturers and distributors,” he noted.
GadiGonen, managing director of Switzerland-based SICPA-GFI, said fuel marking is a must in thwarting oil smuggling, which terrorist and organized crime groups resort to in order to raise funds.
He said a fuel marking system that his company implemented in Tanzania raised some $142 million in additional revenues for the government of that African country.
Ramon Lacdan, local manager of Pennsylvania-based United Color, and Joel Fischl, managing director for Asia of Texas-based Authentix, both agreed with the SICPA and Dow Chemical representatives that fuel marking will help the government increase tax revenues from oil products and protect consumers as well.
“Vehicles are very sophisticated today, and if you put adulterated fuel or smuggled fuel into an automobile, it does bad things to the engines. So (fuel marking provides) consumer protection, public protection and revenue protection,” Fischl said.