Lawmakers urge Pilipinas Shell to pay P7.34-billion tax deficiency

MANILA, Philippines - Two administration congressmen urged Pilipinas Shell yesterday to pay P7.34 billion in unpaid excise taxes on its gasoline importations.

“Shell should give to Ceasar what is due Ceasar. It’s the least a high-earning multinational like Shell can do,” Tarlac Rep. Jeci Lapus said.

He said the Bureau of Customs (BOC) is justified in threatening to seize the oil firm’s imports for February and May worth $923 million to cover its tax deficiency.

Since Shell is determined not to pay its back taxes, confiscating its incoming importations “would be the best alterative for BOC,” he said.

“The Bureau of Customs should not let Pilipinas Shell get away with it. The company should be made to pay its five-year tax deficiency,” he said.

In November last year, the BOC ordered Shell to pay P7.34 billion in excise taxes on its unleaded gasoline imports from 2004 to 2009, which it declared as catalytic cracked gasoline (CCG) and light catalytic cracked gasoline (LCCG).

Shell claims that CCG and LCCG are blending components, which, under the law, are not subject to excise tax. On the other hand, the customs bureau asserts that the shipments were finished products and not blending materials.

Shell went to the Court of Tax Appeals and got a 60-day restraining order, which expires on Feb. 11 or 12. After that, BOC intends to seize the firm’s gasoline imports.

Like Lapus, Rep. Rodolfo Albano III of Isabela supported the bureau’s confiscation plan to force Shell to pay up.

Albano said Customs Commissioner Napoleon Morales should make his word stick.    

“Making Shell pay for its unpaid excise taxes is part of the commission’s job of raising revenues for the government,” he said.

He said he does not believe Shell’s claim that confiscation of its gasoline importations could lead to a fuel shortage.

Shell is just one of the companies supplying the country’s oil needs. The other oil firms, including independent players, will be able to meet our requirement,” he added.

Albano pointed out that Shell’s market share is 30 percent, second to Petron’s 46.7 percent, while Chevron (formerly Caltex) holds about 22 percent of the local market.

He added that there are 22 small distributors of oil products.

Some business groups are supporting Shell’s refusal to pay up, while others are urging President Arroyo to intervene in the case, which they claim is hurting the business environment.