Manila
(29 March) --- Lawmakers on Tuesday
pushed Pilipinas Shell to pay P21 billion
in taxes it allegedly owes the government
even though the oil giant is still disputing
the claim’s validity.
Shell should pay the amount under protest,
Leyte Rep. Andres Salvacion Jr. said,
referring to excise taxes it stopped remitting
to the national government since May 2004.
The estimated P21 billion is the total
amount of taxes Shell owes to the government
for its catalytic cracked gasoline (CCG)
imports.
“There is no other argument for
that matter except to pay," said
Salvacion, vice chairman of the House
Ways and Means committee, during a hearing
on Tuesday.
Akbayan Rep. Risa Hontiveros-Baraquel
backed Salvacion's motion.
However, committee chair Exequiel Javier
branded the move as "premature,"
explaining that the Bureau of Internal
Revenue Itself (BIR) has not even sent
a demand letter telling the oil giant
to cough up the P21 billion.
Unless the BIR issues a demand letter,
a case cannot be brought to court, let
alone give Congress the power to compel
Shell to pay up, he said.
"It is premature right now. We go
to court, we lose the case," Javier
said.
He added that the House panel should wait
for the findings of the task force formed
by the Bureau of Customs (BOC) to probe
the issue.
The P21 billion consists of P3.2 billion
in excise taxes, P383 million in value
added taxes, and P17.8 billion in penalties
for fraud.
Shell stopped paying excise taxes on CCG
imports after then BIR Deputy Commissioner
Jose Mario Bunag issued a memorandum in
April 2004 saying that CCG is exempt from
excise tax because it is a raw gasoline
component.
However, the BIR is currently reviewing
the memorandum's legal basis.
"We are revisiting this memo order.
There is no conclusion yet," said
Jethro Sabariaga of the BIR’s litigation
division, even as he admitted that the
memorandum is "valid and subsisting."
Customs official maintains Shell ‘misrepresented’
fuel imports.
The controversy broke out after the Bureau
of Customs’ Port of Batangas district
collector Juan Tan alleged last month
that Shell misrepresented its imports.
Shell allegedly stated in documents that
the fuel imports were CCG when these were
reportedly unleaded gasoline, Tan said.
Unleaded gasoline is subject to taxes.
Tan maintained his claims during Tuesday's
hearing.
“It's the same as unleaded gasoline...we
feel that there was actually misrepresentation,"
Tan said.
Upon Hontiveros' questioning, Tan also
said it was his "personal opinion"
that what Shell did constituted smuggling.
Shell spokesman Roberto Kanapi, however,
maintained that CCG is different from
unleaded gasoline because the company
uses CCG as a raw material blended with
gasoline derived from crude oil.The end
product consists of 20 to 30 percent CCG,
Kanapi said.
For his part, BOC deputy commissioner
Alexander Arevalo said that the task force
formed to probe whether Shell indeed misdeclared
its imports will only start convening
Tuesday afternoon.
Despite being created as early as February
20, the task force’s probe was delayed
because its head – BOC deputy commissioner
for assessment and operations Reynaldo
Nicolas – is often on official duty
abroad as he represents the agency in
international organizations.
The House panel gave the task force a
week to submit its findings.
Javier, however, suggested that the BIR,
Department of Energy (DOE), and Department
of Justice (DOJ) also take part in the
task force's study to determine whether
CCG should be exempt from excise taxes.
For her part, Finance Undersecretary Estela
Sales said the Department of Finance (DOF)
will wait until the BIR and the BOC send
their official positions on the issue
before the department acts on it.
She added that the DOF was already summoning
parties but decided instead to wait for
the decision of the BOC's task force.
The BIR and the BOC are agencies subsumed
under the DOF.
"We anticipate that it's really going
to be elevated to us," Sales said.
