MANILA, Philippines — The government may procure by the third quarter the services of a company which will be tasked to provide and operate the technology needed for the mandatory fuel marking system, according to the Department of Finance (DOF).
In an interview, Finance Undersecretary Antonette Tionko said the technical working group focused on the implementation of the fuel marking scheme has approved the terms of reference for the bidding of the technology and service provider.
“The TWG has approved the terms of reference, it should be out. We are just ironing certain issues to the procurement in DBM because we are the ones who will fund it,” Tionko said.
As such, Finance Assistant Secretary Maria Teresa Habitan said the bidding may commence by the third quarter. “I think by third quarter,” Habitan said.
According to Finance Secretary Carlos Dominguez, the project underwent a lot of research before implementation. “We’ve done extensive research on this thing. We had meetings with people in different parts of the world that are already implementing the fuel marking system. So we are learning from everybody’s experience in Asia, Africa, Europe. So I think we will come out with a very good (program),” he said.
A mandatory fuel marking scheme, as contained in the Tax Reform for Acceleration and Inclusion Law, aims to curve illicit trade of petroleum products.
According to DOF estimates, the measure is expected to plug as much as P44 billion in foregone revenues annually due to oil smuggling.
The DOF earlier said the implementation of the fuel marking system would cost the government P2 billion annually.
The agency also opened the possibility of charging the cost of the marker dyes to fuel manufacturers and importers. The fuel marker is estimated to cost around P0.9 per liter.
Various companies, including Dow Chemical, SICPA-Global Fluids International (SICPA-GFI), Authentix and United Color Manufacturing Inc., had expressed support for the fuel marking system, saying it was a measure to prevent oil smuggling and boost collection of fuel taxes.
In 2016, revenue collections from petroleum products reached P52.56 billion, according to the DOF. Of the amount, the BIR collected P13.22 billion in the form of excise taxes and P2.11 billion in VAT, while the BOC collected P10.92 billion in excise taxes and P26.30 billion in VAT.