Philippines to tax all imported fuel

The Philippine Department of Finance announced that it will revise taxation procedures for imported fuel and will impose a universal levy on all importers, then reimburse the companies that are determined to have real tax exemption status. Finance Secretary Cesar Purisima said that the move is aimed at curbing the rampant smuggling of petroleum products into the country, which is costing the government approximately PHP30 billion (US$701.2 million) in forgone taxes and duties every year. Purisima said that in Subic Bay, Zambales Province, less than 10% of fuel brought into the Freeport zone is actually consumed within the premises. He said that the rest of the fuel is shipped out, and anything that is shipped out should be subject to taxes. Purisima, who is also the de facto head of the economic team of President Benigno Aquino III, said that the same thing is happening in many special economic zones in the country. The new tax measures are expected to be released in early February, even as the Bureau of Internal Revenue and the Bureau of Treasury work on the mechanics for reimbursements to legally tax-exempt companies. (January 30, 2012)