Finance Secretary Carlos Dominguez III gave Pilipinas Shell Petroleum Corp. until Jan. 10, 2022 to settle its balance of P1.79 billion in alleged unpaid excise and value-added taxes on its alkylate imports to avoid losing its import accreditation.
Finance Secretary Carlos Dominguez III said in a message to reporters the Bureau of Customs—an attached agency of the DOF—received P1.7 billion, representing the first installment of the P3.49 billion in unpaid taxes from Pilipinas Shell. Dominguez said the “balance [is] due on Jan. 10.”
“I am certain that the suspension of Pilipinas Shell’s import accreditation with the BOC will be reconsidered if the second installment is not received on the date indicated,” Dominguez said.
Dominguez earlier said the Customs’ upcoming collection of P3.49 billion in excise and value-added taxes on the alkylate importats of Pilipinas Shell from 2014 to 2020 “levels the playing field” as other oil companies were paying the same on their shipments of the product.
He said in a recent executive committee meeting that Shell’s first payment of P1.79 billion, while under protest, was “a real move forward.”
Pilipinas Shell agreed to pay P3,491,629,824 in taxes on its past alkylate imports in two installments, but said it would be “under protest” as the case was still pending with the courts.
Alkylate is high in octane but has low volatility and can be added to motor gasoline and aviation gasoline to increase octane, while meeting stringent volatility specifications.
Customs Commissioner Reynaldo Guerrero said in a letter to Pilipinas Shell the agency recognized the oil firm’s intent to pay the back taxes and directed it to submit its first payment on or before Dec. 27 this year.
Guerrero made it clear to Pilipinas Shell president and chief executive Lorelei Osial that the possible suspension of the oil firm’s accreditation in case it failed to pay the taxes “was not whimsically raised nor is the same a threat, but rather a proper recourse of the bureau pursuant to existing rules and regulations and in view of the dissolution by the Supreme Court of the temporary restraining order previously issued” on the government’s demand for payment.
The Supreme Court lifted the TRO that barred the government from collecting taxes on Shell’s alkylate imports in March.
The high court also remanded the case to the Court of Tax Appeals, where Pilipinas Shell filed a motion to pursue its previous TRO application to stop the government from collecting taxes on alkylate shipments.
“In the event of default for the payment as agreed upon, the suspension of the accreditation of PSPC shall be forthwith imposed subject to existing rules and regulations, and without prejudice to any other available administrative and judicial remedies which the BOC may exercise,” Guerrero said in the letter.
