POSTSCRIPT / June 2, 2013 / Sunday


Philippine STAR Columnist

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Tax-free fuel rights of locators nullified

CLARK FIELD – Every month, an average of 2,415 residents of Region 3 have to go all the way to the Central Mail Exchange Center in Pasay City to take delivery of parcels or small packages addressed to them.

One obvious remedy to this sadistic burden is to decentralize and deliver the mail matter with dutiable contents though regional and provincial offices, or other satellite agencies that can be opened in the region.

An official at the Ninoy Aquino International Airport in Pasay told us recently that resistance to decentralization stems from a fear of NAIA Customs that their collection would drop if the parcels with dutiable contents are released at the regional or provincial level.

So, because of this fear, thousands of addressees in Pampanga, Zambales, Tarlac and Bataan will continue to spend precious time and money, undergo stress and add to the Metro Manila traffic chaos as they travel to and from the main exchange center in Pasay?

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DECLOGGING: We asked Customs District-XIV collector Ronnie Silvestre about this delivery rigmarole when he was guest in the Friday breakfast “Balitaan” of the Capampangan in Media Inc. (CAMI) at the Bale Balita (House of News) here in Clark.

He deplored the ordeal to which parcel claimants from Central Luzon are subjected in taking delivery in far-away Pasay. But he expressed confidence that the Customs central office will do something about it.

My Pinoy55 brods in Cebu had told me that when Silvestre was district collector there from 2009 to last February, he unclogged the overloaded delivery system by dispersing the release of dutiable mail matter through satellite offices.

The 53-year-old Capampangan lawyer looked relaxed as he broke bread with us at Bale Balita. He should be, having overshot three weeks earlier his fiscal year revenue target of P855 million, one of seven Customs district collectors who have met their quota.

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WATER MIRACLE: Members of the Manila press present asked Silvestre about the Cana-like reverse miracle of smuggled diesel that was impounded in drums turning into water.

Inspecting Clark facilities last April as newly assigned collector, he noticed 156 drums and asked about them. He was told that they contained smuggled duty-free diesel that had been seized. Each drum of diesel would fetch P6,000 in the market.

When one, and then 93 other, drums were opened upon his order, he discovered that their diesel content had been replaced with water! The ensuing investigation on the diesel-to-water miracle and the tampering of the evidence has not been completed.

Substitution is just one of the tricks that a customs collector, in any port, has to contend with. He clarified, however, that the pilfered diesel was not seized in Clark but from several small Bataan gas stations in 2009 and 1010.

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BAD FAITH: Clark authorities, meanwhile, are studying the implications of a levy system whereby taxes and duties are collected in advance on fuel imported through Subic Bay and piped to Clark. Tax-exempt users have to apply for a refund or tax credit.

Subic and Clark locators have been lured by tax and duty privileges. Now the system imposed by the Bureau of Internal Revenue on instructions of the Department of Finance, in effect, takes back the exemptions granted them.

When a locator withdraws fuel from the Subic or the Clark depots, it actually pays taxes and duties because levies are already built into the price. This is a seeming reversal of the promised tax exemptions.

Locators are told that they can apply for a refund or tax credit. The problem is the processing of the application takes more than a year. Some locators say this smacks of bad faith as it is another case of changing the rules in the middle of the game.

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‘BIG 4’ HAND?: The finance department says that the pay first-refund later scheme is meant to nip smuggling, a thriving multi-billion-peso racket in the fuel and other major businesses.

On the other hand, some locators suspect the revenue regulation is aimed more at raising funds in advance than at curbing smuggling. The controls in Subic are so stringent that a good manager can easily cut tax evasion to a minimum.

PTT Philippines Corp. has taken over from Philippine Coastal Storage the operations of the Subic and Clark fuel depots and the 43-kilometer pipeline linking the two ports. The pre-payment rule has made PTT fuel more expensive than before.

Some locators have ventured the guess that the administration’s advance payment scheme was pushed by the Big Four – Petron, Shell, Chevron and Total – to tilt the market in their favor.

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CLARK EARNINGS: Clark Freeport, which sprawls on 34,500 hectares including the aviation complex and the subzone in Sacobia, now has 650 locators employing more than 71,000 workers.

Imports of locators from January to April are valued at $718,105,903 and their exports at $1,127,504,934. The top three exporters are Nannox Philippines ($442,855,523), Phoenix Semiconductor Philippines ($405,684.167), and Yokohama Tires Philippines ($77,634,151).

Yokohama uses some 100,000 liters of fuel a week, or 5.2 million liters a year. The advance tax built into the price jacks up its fuel expenses by about P3 per liter of diesel and P6 per liter of unleaded gasoline. Multiply that by 5.2 million.

Such an unexpected imposition disturbs the cash flow and financial projections of any business.

Clark Development Corp. is expected to help create an attractive business climate for investors, but it reportedly earns some P100 million a year as middleman in the fuel transaction.

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(First published in the Philippine STAR of June 2, 2013)

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