Higher oil tax encourages smuggling

Several groups have expressed concern about the proposal of the Department of Finance to impose higher excise taxes on oil and gas products, saying this could put undue burden on ordinary Filipinos and worse, encourage more smuggling.

According to Finance Secretary Sonny Dominguez, as much as P6 per liter could be levied on diesel and other products like bunker fuel, kerosene and liquefied petroleum gas which are currently exempt from excise taxes. Meanwhile, as much as P10 increase in excise taxes for the first year is being mulled for regular gasoline, aviation fuel, leaded and unleaded premium gasoline and other oil product.

Ordinary Filipinos are worried that increased taxes could trigger higher transportation rates which in turn, would raise the prices of basic commodities. Several legislators have also expressed misgivings about the proposed tax hikes, warning poor Filipinos especially the minimum wage earners would be hit the hardest. Businessmen are also worried the move could result in more rampant smuggling of gas and oil products – a problem the Bureau of Customs has been unable to curb in recent years.

Experts estimate the Philippines is losing as much as P30 billion annually on tax revenues due to smuggling, with unscrupulous dealers and traders conniving with corrupt BOC employees. While the current administration is getting ready to institute reforms in the Customs bureau (which has developed a reputation for being the most corrupt agency according to a survey conducted by the Social Weather Stations) and has warned corrupt employees and officials that their days are numbered, there is still widespread perception that it will take years to get rid of corruption that has become so endemic and well entrenched in the bureau.

Over the years, oil smugglers have developed a network of contacts that help them in various schemes that deprive the government of revenues. One of them is the so-called “dumping,” wherein dealers would get fuel from other sources, then pass these off to consumers as products from a popular brand. Republic Act 8293 (Intellectual Property Code of the Philippines) makes dumping illegal because it is a form of unfair competition.

Just recently, a major oil company also “dumped” five of its dealers over dumping allegations and also pulled out all equipment and materials bearing the oil company brand to prevent these dealers from further duping consumers who think they are paying for the company-branded products. Even local executives are moving to curb smuggling, like Cagayan de Oro City which is coming out with an ordinance to stop the practice of selling liquid petroleum products through plastic or soda bottles or “bote-bote” retail since these products could be sourced illegally through smuggling or pilferage.

Others also point to the Oil Deregulation Law – which virtually allows just anyone to import petroleum products – as a reason why smuggling has increased, with unscrupulous dealers allegedly paying off Customs officials to under-declare or misdeclare imports (volume, raw materials, etc.) which is a form of technical smuggling.  Instead of promoting free market competition among players, the law has only perpetrated smuggling, critics says, urging the government to take a second look at the Oil Deregulation Law.

Dangerous dirty finger

Thousands of overseas Filipino workers who are now unemployed following massive retrenchment in Saudi Arabia due to company closures are counting on the government to help them out of their predicament. Other than repatriation, what these OFWs need are jobs to feed their families. While the government has promised to help, we’re told many still prefer to work in the United Arab Emirates because of higher wages.

OFWs are given briefings about the culture of the host country and the people but they should also be made aware that under the UAE Penal Code, certain actions that Filipinos normally consider as harmless could warrant deportation – among them flashing the dirty finger sign in public because it is considered a crime against dignity and honor.

According to a presiding judge of a misdemeanors court in Dubai, “flashing the middle finger is considered an indecent gesture in public” and is an affront to a victim’s pride, dignity, privacy and modesty. In the first place, individuals working in a foreign country should be aware of the general laws of the host country and show respect for the culture, beliefs and sensitivities of the citizens. It also goes without saying that foreign workers should obey local laws.

Several groups though are proposing amendments to the law that makes deportation mandatory for finger flashers, saying this should be discretionary on the part of the presiding judge. A significant number of lawyers are calling for the deportation order to be optional instead of compulsory in cases involving the crime of “public indecency and breach of modesty and honor.” However, for serious crimes such as sexual molestation and rape, the deportation should still be mandatory, the lawyers.

In evaluating the gravity of the crime involving the middle finger, judges should take into account the parties involved and the circumstances behind the commission of the crime, groups urging for a review of the law added. For example, if the parties involved are two males engaged in a heated argument, during which one makes the dirty finger sign, that should not be considered as cause for mandatory deportation. But if a man gives the finger to a woman, then that’s an entirely different story.

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