BIR tightens tax watch on petroleum products

By David Cahagastian, BusinessMirror

Posted at Jun 14 2014 08:39 AM | Updated as of Jun 14 2014 04:49 PM

MANILA - Internal Revenue Commissioner Kim Jacinto-Henares has ordered that all petroleum and petroleum products in transit after being removed from the refineries, or after having been imported into the country, should carry a withdrawal certificate (WC) or be subject to forfeiture in favor of the government.

Henares issued Revenue Memorandum Circular (RMC) 50-2014 to ensure that all the oil and finished petroleum products removed from the refineries or imported into the country are monitored, and that the taxes for such products have already been paid for.

“As already enunciated in Revenue Regulations 13-77, manufacturers of petroleum or petroleum products are required to prepare an official withdrawal certificate for every removal of products from the refinery, irrespective of destination, indicating therein the name and address of the consignee, the date of removal, quantity and description of very product removed,” RMC 50-2014 said.

“However, such requirement has been expanded to, likewise, cover importers of finished petroleum products,” the circular added.

Henares ordered that every transfer or shipment of petroleum or petroleum products, whether be it from the refinery or storage facility, must be accompanied by a WC, otherwise, such transfer or shipment shall be presumed to be illegally removed and subject to confiscation and forfeiture, regardless of whether the taxes for it has been paid or not.

“For petroleum or petroleum product removed and transported through the use of tankers or marine
vessel, one withdrawal certificate shall be prepared and issued indicating therin the manufacturer/importer, full name and address of consignee, place of final destination, carrier/truck number, date withdrawn, due date of payment, exact description of the product, volume and amount of excise tax paid, whether imported or locally manufactured,” the circular said.

“[The withdrawal certificate] shall be attached to the bill of lading if the products are shipped through a conveyance not owned or operated by the consignor/manufacturer,” she said.

In previous cases decided upon by the Court of Tax Appeals and the Supreme Court, it has been held that even the vessels upon which such products deemed to be illegally withdrawn or smuggled can be subject to forfeiture, as mandated by the Tariff and Customs Code.