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Customs to pursue Pilipinas Shell’s tax liabilities

The Philippines’ Bureau of Customs (BOC) will go after an estimated Php21 billion (US$439.2 million) worth of allegedly unpaid excise and value-added tax (VAT) of oil refiner Pilipinas Shell Petroleum Corp., an agency official said. “We really need to collect,” said BOC deputy commissioner Alexander Arevalo during a Congressional inquiry conducted by the House ways and means committee in March. The committee is investigating Shell for accusations that the company defrauded the government Php21 billion (US$439.2 million) in unpaid excise and VAT and penalties on imported unleaded gasoline for more than a year starting October 2007. During the hearing, Shell spokesperson Roberto Kanapi said the company is importing raw materials and not the product itself, which is taxable. The Bureau of Internal Revenue (BIR) said it is reviewing the legal opinion issued by then BIR deputy commissioner Jose Mario Bunag, which stated that Shell should not be taxed for the imported raw materials. The House committee started its investigation into the matter after receiving information from a certain Geronimo Pinar, a taxpayer and private citizen. Shell maintained it did not have any tax liabilities because the company imported catalytic cracked gas (CCG), which it uses in making unleaded gasoline. (March 25, 2009)