The chairman of the House of Representatives committee on ways and means on Monday called for stricter customs enforcement on imported petroleum products.
Albay Rep. Joey Sarte Salceda made the call in a briefing to legislators by the Bureau of Customs (BOC) and the Bureau of Internal Revenue (BIR) as his committee conducted an investigation into the use of customs bonded warehouses as smuggling conduits.
During the committee briefing, Salceda tasked the BOC and the Department of Finance to form a Task Force against fuel smuggling, colloquially known as ‘paihi.’
“If you want to know why some gasoline stations can offer prices 10 pesos lower than the competition, look no further than fuel smuggling. It’s real and it happens just under our noses. The opportunity to catch smuggling is everywhere from the port to the gasoline station, so we can if we try,” Salceda said.
He said the government lost some P357 billion due to fuel smuggling alone from 2010 to 2019.
Citing trade data from the United Nations Conference on Trade and Development, Salceda said the value of potentially smuggled fuel from 2010 to 2017 was on the rise, before the fuel marking program under the Tax Reform for Acceleration and Inclusion Law helped lower the probable value lost to smuggling in 2018.
While smuggling has since been on a slow decline, Salceda says the foregone revenues are increasing as TRAIN also imposed new excise taxes on fuel.
“We have lost P357 billion in foregone revenues due to fuel smuggling from 2010 to 2019. While fuel marking has helped lower smuggling, the bleeding on the revenue side is still growing because we raised taxes on fuel products in 2018,” he said.
Fuel smuggling, he said, is easiest in freeport zones where marking is only conducted at the gates and not upon entry at the freeport, and where enforcement is less strict as freeports are outside customs territory.