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Consumer group raps oil firms for VAT overcharging

Advocacy group Laban Konsyumer, Inc. (LKI) has formally lodged its complaint with the Department of Finance (DOF) on the “overcharging raps” allegedly committed by the oil companies relative to the pass-on of value-added taxes (VAT) as component of excise taxes in the overall pump prices.

LKI President Victorio Mario A. Dimagiba disclosed to the media that he already raised the “VAT overcharging” allegations to Finance Assistant Secretary Antonio Lambino.

The group further indicated that it is seeking “immediate correction, implementation, audit of the excess VAT payments and appropriate remedial action.”

In his letter-complaint, lawyer Dimagiba stipulated that “consumers were being overcharged and were thus overpaying VAT,” which he further claimed is “a heavy burden especially on the poor consumers’ daily lives.”

The LKI noted that the total overcharging could run in the billions of pesos – if based on the volume of sales reported to the Department of Energy (DOE). Nevertheless, he stressed that he would prefer government to be the one to draw up the figures.

The DOE and the oil companies have yet to give their side of the story on these VAT overcharging allegations. The director of DOE-Oil Industry Management Bureau – lawyer Rino Abad – was also copied in LKI’s letter to Lambino that was dated January 15 this year.

On the complaint, Dimagiba is seeking for swift action from relevant government agencies – primarily of the DOF which is overseeing the pass-on of corresponding taxes on the sale of fuel products.

Dimagiba emphasized he personally experienced such excess VAT payments when he filled up his fuel tank at a Petron gasoline station in Fairview, Quezon City.

He narrated that when he paid for his fuel purchase, “VAT was paid on top of VAT of the second tranche of excise taxes and resulted in overpayment of VAT of P0.025 per liter.”

Dimagiba’s group has been persistently monitoring the implementation of fuel excise taxes under the Tax Reform for Acceleration and Inclusion (TRAIN) Act and has also been lending his voice to various issues of the energy sector.

The VAT overcharging is a new round of allegation thrown against the oil companies – as they were pounded with the same indictments in the past – especially when prices were hitting record-high levels a decade ago.

Starting January this year, the oil companies implemented the P2.00 per liter increase in excise taxes for diesel and gasoline products courtesy of the TRAIN Law’s second tranche tax package – and that tax component was still levied with VAT charges.