Oil companies pay less taxes while prices soar
WHILE sales of petroleum products are soaring, the annual taxes paid by oil companies are declining.
Despite ending 2009 with banner gross sales of P453.692 billion, the local petroleum industry only paid about P17.128 billion in government taxes in the same period.
The taxes paid by oil companies in 2009 do not even represent a quarter of their gross sales for the said year.
Bulk of the taxes paid by oil players represent excise tax payments of about P12.830 billion followed by P3.129 billion payments as corporate income tax.
Value Added Tax (VAT) payments reached only P1.002 billion while other national and local taxes paid amounted to P166.85 million.
For last year, oil companies practically “swam” in their own sea of profits, which were generated by their twin sales of locally refined and imported petroleum products, amounting to P307.033 billion and P132.023 billion, respectively.
Sales income from liquefied petroleum gas (LPG) and other chemical products reached P14.636 billion.
The oil industry is likewise poised for another windfall profit this year as shown by its 8-month gross sales of P388.492 billion from January to August in 2010.
The eight-month gross sales are only P65.2 billion shy of the combined gross sales registered by the oil industry in 2009 with still four months of gross sales to be accounted for.
The likelihood of posting another banner year in 2010 is bolstered by the fact that oil companies have already surpassed its 2009 gross sales for LPG and other chemicals in just eights months of the current year.
Government data showed that gross sales of oil players from its LPG and other chemical products have already reached P19.266 billion from January to August, outpacing the P14.635 billion sales recorded in 2009.
But despite the glowing figures, the oil companies would actually end up paying less government taxes this year compared to 2009, going by its tax payments for the first eight months of 2010.
For the January to August period, oil companies only paid around P9.865 billion in government taxes or short by P7.263 billion to duplicate the taxes turned in by the industry for the entire 2009.
Of the P9.865 billion taxes paid, P6.389 billion represented excise tax payments while P2.844 billion was for corporate income tax. VAT payments reached P530 million.
To achieve the same tax remittance last year, oil companies will have to shell out P7.263 billion during the last remaining tax-paying months of September to December.
Oil companies came under fire recently for sneaking in an increase of 50 centavos per liter for its gasoline products while the rest of Northern Luzon was being battered by supertyphoon Juan.
Early this October, the oil players increased its prices by P1.25 per liter. Since February 2009, pump prices of unleaded gasoline have increased by P11.75 to P43.75 from P32 per liter last year or a price expansion of about 36.7 percent.
As of October 12, the retail price of the high-octane premium gasoline has nearly breached the P50 per liter level.
The oil industry has been accused of padding its pump prices by at least P8 per liter. Dino Ng