SC orders Chevron to pay P1-B in back taxes


By William B. Depasupil, Reporter

The Supreme Court (SC) has ordered Chevron Philippines Inc., one of the three biggest petroleum firms in the country, to pay government some P1 billion in unpaid duties and taxes for oil imported 12 years ago.

In a 35-page ruling penned by Justice Renato Corona, the Court’s First Division ordered the oil firm “to pay the amount of P893.78 million plus 6 percent legal interest per annum accruing from the date of the promulgation of the decision until its finality.”

Chevron, formerly Caltex Phils. Inc., can file a motion for reconsideration before the High Court.

The petroleum firm incurred the tax deficiency between March 8 and April 10, 1996, covering shipments of 354 million liters of crude oil, six million liters of reformate, and 16 million liters of feed stock.

The oil firm, according to court records, filed the required import entry more than 30 days after the shipment had arrived and was appraised a 3 percent duty, as provided by Republic Act 8180 or the Downstream Oil Industry Regulation Act of 1996, which became effective on April 16, 1996. Prior to the effectivity of that law, the duty on crude oil was 10 percent.

Three years later, then Department of Finance Secretary Edgardo Espiritu received an anonymous tip claiming the deliberate concealment, manipulation and scheme by Chevron and Pilipinas Shell in the importation of crude oil resulting in huge revenue losses for the government.

Avoiding to pay the 10-percent rate

It was found out during the investigation that Chevron filed a late declaration of its oil import for to avoid paying the 10-percent rate of duty and be entitled to pay only 3 percent as provided for under the law.

On August 1, 2000, the district collector of Customs at the Port of Batangas sent a demand letter to Chevron for the immediate settlement for the discrepancy in its tax payment.

Also, an investigation by the Bureau of Customs showed that the import entries for the questioned oil importation were filed by Chevron beyond the 30-day, non-extendible period prescribed under the Tariff and Customs Code.

With the violation, the oil shipments were already considered abandoned and seized in favor of the government.

Tax officials concluded that the fraud was made in collusion with the former Port of Batangas district collector. It also ordered Chevron to pay P 1.1 billion, representing the total dutiable value of the importations.

On appeal, the Court of Tax Appeals (CTA) also ruled that the oil firm was liable for deficiency in customs duties.

The Supreme Court pointed out that as a general rule, the CTA’s findings and conclusions are accorded great respect and are generally upheld by the High Court. (ManilaTimes)

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My Take:

May the SC continue this kind of work.  At least they’re making my hope for this country stand firm.

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