Shell wants Palace, DOF intercession in tax row with Customs

Pilipinas Shell Petroleum Corp. is trying to seek the intervention of the Department of Finance (DOF) and the Palace in its row with the Customs bureau over its alleged nonpayment of P7.34 billion in back taxes. "We have ongoing communications with the Department of Finance and Malacañang on this," Shell communication manager Mylene Santos told reporters on the sidelines of a community stakeholders' meeting in Batangas City on Tuesday. She admitted that the company has been drawing up worst case scenarios, including a possible refinery shutdown. She added that Shell would elevate the case to the appellate court in case it loses at the Court of Tax Appeals, which temporarily stopped the Customs bureau from seizing future oil shipments of Shell. "As of now, it's business as usual for the refinery. We are producing normally and we have not experienced any disruption in production," said Arnel Santos, Shell vice-president for manufacturing. Shell's inventory can cover 10 to 20 days. Santos said if the government pursues the seizure, Shell would lose P11 billion. Customs, on behalf of the Bureau of Internal Revenue, is forcing Shell to pay P7.34 billion in excise taxes on shipments of what the oil firm claims are raw materials from 2004 to 2009. Shell claims duties for the imports, which it uses to produce unleaded premium gasoline, have been paid with Customs. And being raw materials, they are not subject to excise taxes. But Customs claims the shipments were really finished goods and had been misdeclared. Shell has criticized the BIR for reversing its position in the tax dispute. The Court of Tax Appeals issued on December 12 a 60-day temporary restraining order to prevent Customs from seizing imports of Shell worth $400 million to cover for the alleged tax deficiency. Shell claims to have paid billions of pesos in excise taxes on all unleaded premium gasoline withdrawn from its refinery. The company insists taxing imported raw materials and the finished product constitutes double taxation. — GMANews.TV