Shell welcomes CA ruling on oil tax collection

MANILA, Philippines - The Court of Appeal’s (CA) decision to block the government from collecting more than P2.8 billion in tax liabilities affirms the validity of oil refiners’ tax credit certificates (TCCs), an official said yesterday.

“Pilipinas Shell Petroleum Corp. welcomes the favorable decision of the court. It is a positive affirmation of our position that Pilipinas Shell’s transfers of TCCs were always done in accordance with all applicable laws, rules and regulations,” Pilipinas Shell spokesman Roberto Kanapi said in a text message.

The appellate court has denied the Bureau of Internal Revenue’s (BIR) plan to collect more than P2.8-billion worth of taxes from oil firms Pilipinas Shell and Petron Corp.

The ruling said the oil refiners were qualified transferees of TCCs. TCCs are incentives granted to qualified businesses to exempt them from taxes.

In a 17-page decision written by Associate Justice Ramon Cruz, the CA’s Ninth Division affirmed previous rulings of the Court of Tax Appeals, which repealed the BIR’s orders that invalidated the TCCs.

The BIR also required the two oil industry giants to pay their tax liabilities.

Petron Corp. officials could not be reached for comment yesterday.