THE Bureau of Customs (BOC) questions the posting of a surety bond of Pilipinas Shell Petroleum Corp. (PSPC) as it was not informed about such payment bond.

Batangas Port collector Juan Tan said they have not been informed by the Court of Tax Appeals (CTA) when the Solicitor General Alberto Agra has accepted the offer of Shell to post a surety bond to answer for its P7.34 billion in back taxes.

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He noted that the acceptance of the bond countered an earlier agreement between the petroleum firm, Department of Finance (DOF) and the Office of the President that Shell will have to setup an escrow account equivalent to P7.34 billion.

A surety bond does not require Shell to release the contested amount from its coffers but will just pay a third party to assure the government of payment of the entire P7.34 billion if the court rules in favor of BOC.

In this case, Shell will pay its third party a premium of P1.3 million.

“What PSPC (Shell) did is tantamount to giving PSPC unwarranted benefits at the expense of the government because PSPC will then be allowed to keep and use the said P7.34 billion of the government without any consideration,” Tan said in his letter to Commissioner Napoleon Morales.

The BOC official is also questioning Agra’s action since he is new to the post.

He explained that since the start of the case, solicitor general Thomas Laragan, Bernard Hernandez, and Amparo Cabotaje-Tan did not sign the said acceptance document.

“Being new to OSG, Solgen Agra could not have known all facts of the case and it was irregular and improper for him to act on the same as he did without the knowledge and participation of the concerned lawyers of OSG,” he added.

Agra accepted the proposal of Shell on February 26.

Tan was the one who recommended to Morales to go after Shell for the importation of its catalytic cracked gasoline (CCG) and light CCG since 2004 to 2009.

The oil company is insisting that the two products should not be slapped with an excise tax since they will still refine these in order to create unleaded gasoline.

BOC, together with the Bureau of Internal Revenue both claimed that CCG and LCCG are already gasoline and therefore should be slapped with excise tax at a rate of P4.35 per liter.

Excise taxes, which BOC is collecting in behalf of BIR, are being collected at the source before the product is sold to the market. (FP/Sunnex)