BOC, BIR to start field testing enforcement on fuel products on April 26

Marje Pelayo   •   April 9, 2021   •   578

MANILA, Philippines — The Bureau of Customs (BOC) and the Bureau of Internal Revenue (BIR) have announced their intention to begin Field Testing Enforcement activities on fuel products beginning April 26.

The testing covers gasoline, diesel, and kerosene found in warehouses, storage tanks, gas stations, other retail outlets, and in such other properties, to check if they contain the required Fuel Marker level.

Vessels, tank trucks, and similar fuel transporting vehicles will also be covered by the enforcement activities.

Under the Tax Reform for Acceleration and Inclusion (TRAIN) Act, petroleum products found without the Official Fuel Marker or not containing the required level of the Official Fuel Marker are subject to payment of duties and taxes, as well as appropriate fines and penalties.

The payment is without prejudice to the confiscation and forfeiture of such Unmarked or Diluted Fuel and the filing of the appropriate criminal case.

The Field Testing process will be done using Mobile Laboratory Units equipped with analyzers capable of detecting the Official Fuel Marker’s presence in any fuel sample.

The test result will be generated on-site and will indicate a pass or fail result. Products with failed results will be subjected to Confirmatory Testing in the Fuel Testing Facility.

For purposes of transparency, the owner of the fuel or his representative will be allowed to witness the Field and Confirmatory Testing.

The two Bureaus began the Transitory Field Testing activities in February this year and will continue until April 26, 2021.

Under the Transitory Field Testing, sample fuels from retail stations and tank trucks in the National Capital Region (NCR) and nearby provinces were tested to determine the marker levels in the fuel supply available in the domestic market.

The Fuel Marking Program aims to raise revenues while curbing fuel smuggling and leveling the Philippine oil industry.

Beginning its implementation in September 2019 to December 2020, the BOC and BIR marked a total of 17.55 billion liters of fuel and have collected Php171.72 billion in duties and taxes under the program.

BIR to probe tax compliance of initial 250 social media influencers

Robie de Guzman   •   September 16, 2021

MANILA, Philippines – The Bureau of Internal Revenue (BIR) is set to launch an investigation into the initial list of 250 social media influencers to check on their tax compliance.

In a report to Department of Finance (DOF) Secretary Carlos Dominguez III, the BIR said that Letters of Authority (LOAs) for the conduct of investigation have been issued to certain social media influencers found to be “top earners.”

The BIR said that social media personalities who earn money from their posts on digital media are classified as self-employed individuals or persons engaged in trade or business as sole proprietors.

Their earnings are generally considered as business income as defined under BIR’s Revenue Memorandum Circular (RMC) No. 97-2021 issued last Aug. 16, the bureau added.

“We encourage them to register, and then we have the profiling of over 250 personalities. We will do the investigation so that they would pay the necessary corresponding tax on their earnings,” BIR Deputy Commissioner Arnel Guballa said in his report to Dominguez.

Under RMC 97-2021 issued in August, social media influencers should pay income tax and percentage tax or, if applicable, the value-added tax (VAT), as mandated under the National Internal Revenue Code (NIRC) and other existing laws.

Based on the Circular, social media influencers are defined as those who derive their income from the following sources:

  1. a) You Tube Partner Program;
  2. b) sponsored social and blog posts;
  3. c) display advertising;
  4. d) becoming a brand representative/ambassador;
  5. e) affiliate marketing;
  6. f) co-creating product lines;
  7. g) promoting own products;
  8. h) photo and video sales;
  9. i) digital courses, subscriptions, e-books;
    j) podcasts and webinars

The Circular states, among others, that social media influencers who receive free goods in exchange for promotions must declare as income the fair market value of these products.

Income treated as royalties from another country, including payments under the YouTube Partner Program, shall likewise be included in the computation of the gross income of the socmed influencer and shall be subject to tax.

“It must be emphasized that the BIR also has the power to obtain information from foreign tax authorities pursuant to the Exchange of Information (EOI) provision of the relevant tax treaties. The BIR has the means to verify their income as it is clothed with a special power to obtain information from its treaty partners. The BIR may safely rely on the data provided by its treaty partners to establish the influencer’s tax liability,” RMC 97-2021 stated.

“The social media influencers are, therefore, advised to voluntary and truthfully declare their income and pay their corresponding taxes without waiting for a formal investigation to be conducted by the BIR to avoid being liable for tax evasion and for the civil penalty of fifty percent (50 percent) of the tax or of the deficiency tax,” it added.

In order to avoid the risks of double taxation, the BIR advised social media influencers receiving income from a non-resident person residing in a country, with which the Philippines has a tax treaty, to inform the latter that they are residents of the Philippines, and are, therefore, entitled to claim treaty benefits provided under the relevant tax agreement.

The Circular said social media influencers who “willfully attempt to evade the payment of tax or willfully fail to make a tax return, to supply accurate and correct information or to pay tax” shall, in addition to the payment of taxes and corresponding penalties, be held criminally liable under the Tax Code.

4 kilograms of shark teeth seized in Mactan, Cebu

Marje Pelayo   •   September 6, 2021

MANILA, Philippines — The Bureau of Customs (BOC) reported the seizure of a parcel containing 4.98 kilograms of extracted shark teeth misdeclared as plastic components for fashion accessories.

The shipment, which was seized in BOC Cebu-Subport of Mactan on Tuesday (August 31), was discovered through x-ray imaging which prompted the X-Ray inspection project team (XIP) to mark it for further verification.

Accordingly, BOC authorities conducted a physical examination on the parcel together with representatives from the Bureau of Fisheries and Aquatic Resources (BFAR) and DHL Express Cebu.

The BFAR representative confirmed the contents of the parcel to be shark teeth and not plastic components as declared and records show the shipment had no import permit issued by BFAR.

Acting District Collector Charlito Martin Mendoza immediately issued a warrant of seizure and detention against the shipment.

The seized articles will be disposed of in accordance with existing customs laws and regulations after undergoing seizure and forfeiture proceedings.

Unmanifested container of mechanically separated chicken seized at Port of Cebu

Marje Pelayo   •   September 1, 2021

MANILA, Philippines – The Bureau of Customs (BOC) reported the seizure of a container of unmanifested goods that included uncooked mechanically separated chicken.

The shipment, which was identified to have originated from China, was intercepted at the Port of Cebu last Tuesday (August 24).

The container was flagged down after noting its exclusion from the vessel’s inward foreign manifest and stowage plan.

Also, the vessel failed to file a supplemental manifest within two days from the date of discharge of the last package as required by Customs Administrative Order (CAO) No. 15-2020.

The Port of Cebu initially issued a show cause order against the shipping line to which the latter replied explaining that the unmanifested container was intended to be loaded into a different vessel going to Cebu.

Due to a system glitch in the operational activities of the vessel, the container was inadvertently loaded and discharged at the Port of Cebu.

Acting district collector Charlito Martin Mendoza issued a warrant of seizure and detention against the shipment after finding probable cause for violation of the Customs Modernization and Tariff Act.

The container was immediately subjected to physical examination to determine its contents and was found to contain uncooked mechanically separated chicken.

The seized goods will undergo seizure and forfeiture proceedings and will thereafter be disposed of in accordance with prevailing customs laws and regulations.

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