DOF steps up campaign against oil smugglers

MANILA, Philippines - The Department of Finance (DOF) is set to put its foot down on the reported smuggling of oil into the country as the administration of President Aquino stepped up its campaign against tax cheats and smugglers.

Finance Secretary Cesar Purisima has ordered Customs Commissioner Angelito Alvarez to look into the complaint of businessmen about the rampant smuggling of oil into the Philippines.

Purisima issued the directive after the Makati Business Club (MBC) and the Federation of Philippine Industries (FPI) complained during the Philippine Mid-Year Economic Briefing held last Wednesday about the smuggling of various products including oil products, motor vehicles, and even steel products in different ports of entry particularly the Subic Bay freeport and special economic zone.

MBC chairman Ramon del Rosario Jr. stressed the need for the government to check the rampant smuggling of oil products in Subic Bay and motor vehicles in other ports of entry for the administration to plug tax leakages.

“Convicting one big smuggler and tax evader would be a big factor,” del Rosario stressed.

FPI chairman emeritus Meneleo Carlos also stressed the importance of the new government to stop rampant smuggling of various products such as oil, steel, among others into the country.

“We’ve been studying the oil industry where there is a lot of reports or rumors about oil smuggling. This is a priority industry that I’ve asked Commissioner Alvarez to look into. We’re also looking at the steel industry and several other key areas of rampant smuggling. This fight against smuggling and tax evasion will not stop until we’ve satisfied ourselves that the government is getting its fair share in collecting taxes,” he said.

He pointed out that the investigation would cover all ports in the country and even major players in the liberalized oil industry.

“We’re looking all across the country. As you know, the Philippines is an archipelago and there’s so many ports of entry. We’re not exempting anyone, we’re looking at the whole industry,” Purisima stressed.

The previous administration decided to pursue a fuel marking program to curb rampant oil smuggling into the country. 

The program which involves the marker dye system to determine whether certain types of imported fuel have been cleared for entry to the Philippines has been put in place in major ports of entry including Subic Bay, Clark freeport and economic zone as well as the Port of Batangas.

Estimates showed that the government loses some P32 billion in taxes every year due to the rampant oil smuggling.

However, Petron Corp. chairman and San Miguel Corp. president Ramon Ang earlier said that as much as 30 to 35 percent of the gasoline and diesel sold in the market today come from oil smuggling resulting in huge losses to the national coffers of about P30 billion to P35 billion.

Purisima decided to revive the government’s campaign against high profile tax evaders and smugglers through Operation RATE (Run After Tax Evaders) and RATS (Run After The Smugglers) that were put on the back burner by former Finance Secretary Margarito Teves.