Middle East conflict seen boosting BOC collections

AFTER the Bureau of Customs (BOC) surpassed its revenue target in February, its collections could get a temporary boost as widening tensions in the Middle East push global oil prices higher.

- By REINE JUVIERRE ALBERTO ¥ @reine_alberto

“Higher oil prices can boost government revenue collections, particularly for the BOC. Since imports are taxed on value, a rise in global crude prices increases the value-added tax base,” Domini S. Velasquez, former chief economist of the Department of Finance (DOF), told the BusinessMirror.

Velasquez, who is now the chief economist of the China Banking Corp., said that even if the Philippines imports the same amount of oil, the government collects more taxes.

The government imposes a 12-percent VAT on petroleum products. This is on top of excise taxes levied under the Tax Reform for Acceleration and Inclusion (Train) law (Republic Act 10963).

The BOC has collected P247.12 billion in import duties and other taxes last year under the government’s fuel marking program.