Court stops tax on ecozone oil imports

ANGELES CITY, Philippines – The Regional Trial Court here issued yesterday 20-day temporary restraining order (TRO) against a pending regulation of the Bureau of Internal Revenue (BIR) requiring oil importers at Freeport zones to pay regular taxes.

Judge Philbert Iturralde issued the TRO against BIR’s Revenue Regulation No. 2-2012, which was slated for implementation 15 days after its publication and was addressed to Finance Secretary Cesar Purisima and BIR Commissioner Kim Jacinto-Henares.

The TRO was petitioned by Pampanga 1st district Rep. Carmelo Lazatin.

Lazatin said that the BIR regulation violated Republic Act 7227 which founded the former US military bases at Clark and Subic as “special economic zones operated and managed as a separate customs territory.”

He said that under RA 7227, investors at the freeport zones are exempted from the usual taxes imposed in other parts of the country, as they are required to pay the government only five percent of their gross earnings (GIE) as incentives for investing in such zones.

The BIR regulation, he added, was “ a clear violation of the 1987 Constitution.”

The BIR, however, earlier said it issued the new regulation to combat alleged rampant oil smuggling and ensure that proper taxes are correctly collected from petroleum and other oil products imported into the Philippines, particularly those coursed through the freeport zones.