RMC No. 94-2020 — Circularizes Joint Memorandum Order No. 1-2020 prescribing the implementing guidelines for the collection and disbursement of Fuel Marking Fees pursuant to DOF-DBM-COA Permanent Committee Joint Circular 001.2018, and payment of Fuel Marking Fee using BIR Form No. 0623 Digest | Full Text | Annex B

REPUBLIC OF THE PHILIPPINES

BUREAU OF INTERNAL REVENUE DEPARTMENT OF FINANCE

Quezon City

September 2, 2020

REVENUE MEMORANDUM CIRCULAR NO. 94- 2020

SUBJECT : Circularizing the Joint Memorandum Order (JMO) No. 1-2020

Prescribing the Implementing Guidelines for the Collection and Disbursement of Fuel Marking Fees Pursuant to DOF-DBM-COA Permanent Committee Joint Circular 001.2018 and Payment of Fuel Marking Fee Using BIR Form No. 0623

TO : All Internal Revenue Officers and Others Concerned

Disbursement of Fuel Marking Fees Pursuant to DOF-DBM-COA Permanent Committee Joint No. 1-2020 dated August 28, 2020, " Prescribing the Implementing Guidelines for the Collection and Circular 001.2018." concerned, attached herewith as Annex "A" is the signed copy of Joint Memorandum Order (JMO) For the information and guidance of all internal revenue officials, employees and others

the same time as the internal revenue taxes on petroieum product subject to Fuel Marking are collected. For this purpose, filer or declarant shall use the Fuel Marking Fee Form (BIR Form No. 0623) marked as Annex "B" for payment of Fuel Marking Fee. The BIR must ensure that the Fuel Marking Fee has been paid before the marking of the fuel, hence prepayment is authorized. Pursuant to Section 12 of the NIRC, as amended, BIR shall collect the Fuel Marking Fees at

added to the Declared Volume of the petroleum product to be marked. Thus, the Fuel Marking Fee shall be computed as follows: In consideration of the biofuel requirements, a volume percentage allowance shall be

a. For Gasoline: FMF= Declared Volume x 110% x Php 0.06884 (VAT inclusive) b. For Diesel:

FMF= Declared Volume x 102% x Php 0.06884 (VAT inclusive) C. For Kerosene: FMF= Declared'Volume x Php 0.06884 (VAT inclusive)

publicity as possible. All internal revenue officials and employees are enjoined to give this Circular as wide a

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CAESAR R. DULAY Commissioner of Internal Revenue

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Annex "A"

DEPARTMENT OF FINANCE Bureau of Internal Revenue Republic of the Philippines Bureau of Customs

JOINT MEMORANDUM ORDER NO. _1-2020 28_August 2020

SUBJECT: PRESCRIBING THE IMPLEMENTING GUIDELINES FOR THE CIRCULAR 001.2018 COLLECTION AND DISBURSEMENT OF FUEL MARKING FEES PURSUANT TO DOF-DBM-COA PERMANENT COMMITTEE JOINT

SECTION 1. Scope. -- This Order shall govern the collection of Fuel Marking Fees and the disbursement of Fuel Marking"Trust Account for the 2nd to 5th year of DOF-BIR-BOC Joint Circular 001.2019 implementation of the Fuel Marking Program pursuant to Section 148-A subsection Department of Finance (DOF), Department of Budget and Management (DBM) and Commission on Audit (COA) Permanent Committee Joint Circular No. 001.2018 and (h) of the National Internal Revenue Code (NIRC), as amended, in relation to

SECTION 2. Objectives.

2.1. To establish the procedure for the collection of Fuel Marking Fees for the mandatory marking of locally refined, manufactured or imported gasoline, diesel and kerosene, including those in Free Zones, after the duties and taxes thereon have been paid; and

2.2. To provide guidelines on the documentation and the validation thereof for purposes of payment to the Fuel Marking Provider.

are defined accordingly: SECTION 3. Definition of Terms. For purposes of this Order, the following terms

3.1 the importer for purposes of payment of excise tax duly supported by verifiable documents, such as but not limited to Bill of Lading Authority to Release Imported Goods (ATRIG), Commercial Declared Volume -- shall refer to the volume of fuel declared by Invoice, etc.

3.2 Free Zone -- shall refer to special economic zones registered with the Philippine Economic Zone Authority (PEZA) under Republic Act No. 7916, as amended, duly chartered or legislated special economic zones and freeports such as Ciark Freeport Zone: Poro

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Republic Act No. 9400; the Aurora Speciai Economic Zone under Republic Act No, 9490, as amended; the Cagayan Special Economic Zone and Freeport under Republic Act No. 7922; the Zamboanga City Special Economic Zone under Republic Act No 7903; the Freeport Area of Bataan under Republic Act No. 9728) Point Freeport Zone; John Hay Special Economic Zone and Subic Bay Freeport Zone under Republic Act No. 7227, as amended by

Iaw': and such other freeports as established or may be created by

3.3 the taxes and duties thereon have been paid.? Fuel Marking --- shall refer to the addition or administration of limited to, unleaded premium gasoline, kerosene, and diesel, after manufactured, or imported into the Philippines, such as but not Official Fuel Marker to petroleum products that are refined

3.4 Fuel Marking Fee (FMF) --- shall refer to the fee to be paid by the refiner, manufacturer or importer of petroleum products for the marking services of the Fuel Marking Provider. The same shall be computed based on the agreed contract price of Php 0.06884 (VAT inclusive), multiplied by the actual liter of fuel marked by the Fuel Marking Provider.3

3.5 regulations.4 Fuel Marking Provider --- shall refer to the firm engaged by the government that is responsible for providing. monitoring and administering the Official Fuel Marker, provide equipment and devices, conduct field and confirmatory tests, and perform such other acts incidental or necessary to the proper implementation of the provisions of the law and its implementing rules and

3.6 Fuel Marking Trust Account ---- shall refer to the trust liability Marking Program and maintained by the Bureau of the Treasury (BTr) pursuant to Section148-A, subsection (h) of the NIRC. as account established for the purpose of implementing the Fuel amended and DOF-DBM-COA Joint Circular No. 001.2018 dated October 2, 2018.5

3.7 Implementing Agencies mandated under Section 148-A, subsection (f) to supervise and (BOC) and the Bureau of Internal Revenue (BiR), which are -- shall refer to the Bureau of Customs

2 DOF-BOC-BIR Joint Circular 001.2019, Section 2.6 3 Cf Section 3.3.. Permanent Committee Joint Circular No. 001-2018 4 cf Section 148-A, suiosection (f) of the National Internal Revenue Code as amended by Republic Act 5 DOF-BOC-BIR Joint Circular 001.2019, Section 2.9 Republc Act No 10863, Section 102{w} No. 10963

PRESCRIBING THE IMPLEMENTING GUIDELINES FOR THE COLLECTION AND DISBURSEMENT OF FUEL. MARKING FEES PURSUANT TO DOF-DBM-COA PERMANENT COMMITTEE JOINT CIRCULAR BUREAU OF INTERNAL REVENUE Page 2 of 8 001.2018

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implementation of the Fuel Marking Program. direct the Fuel Marking Provider in the administration and

3.8 Importer --- shall refer to a natural or juridical person engaged in the import of any goods into the Philippines. For the purpose of this Order, this shall also refer to the person, entity, or consignee. on-record who imports the petroleum products into the country.

3.9 Marking Services solution provided by the Fuel Marking Provider to the Philippine conducting field testing and confirmatory iaboratory testing, and all contracted.s Government. These shall include but are not limited to, providing the fuel markers, administering and injecting the fuel markers other necessary services and goods in relation to FMP as - shall refer in general to the end-to-end

3.10 Official Fuel Marker -- shall refer to the chemical additive and

application or administration to the unmarked fuel.? corresponding quantitative ratio identified by the Secretary of Finance as the Official Fuel Marker. The Official Fuel Marker must be distinct and, to the greatest degree possible, impossible to imitate or replicate. Provided, that the Official Fuel Marker must be unique to the Philippines and that its chemical composition and quantitative ratio must persist for at least three (3) years from their

3.11 iocally refines petroleum through distillation, conversion and treatment thereof.: Refiner -- shall refer to any a natural or juridical person who

manufactured, refined or imported petroleum products are collected.9 In all instance the FMF and the internal revenue taxes must be paid by the importer or refiner prior to the marking activities. SECTION 4. Collection of Fuel Marking Fees. The BIR and BOC shall collect the Fuel Marking Fee (FMF) at the same time as the internal revenue taxes on

4.1 BOC. Pursuant to Section 12 of the NIRC, as amended, BOC subject to Fuel Marking. For this purpose, the following guidelines shall collect the Fuel Marking Fees on imported petroleum product shall be observed:

a. When the Importer or declaration, the code "FMF" shall trigger the computation of declarantiodgesthe goods

: cf. Department of Erergy (DOE) Department Circular 2003-01-001 DOF-BOC-BIR Joint Circular 001.2019. Section 3.1 DOF-DBM-COA Permanent Committee Joint Circular 001.2018. Section 3.7 DOF-BOC-BIR Joint Circular 001.2019, Section 2.13

PRESCRIBING THE IMPLEMENTING GUIDELINES FOR T FUEL MARKING FEES PURSUANT TO DOF-DBM-COA PERMANENT COMMITTEE JOINT CIRCULAR BUREAUOF INTERNAL REVENUE nTttyTN THE COI CTION AND DISBURSEMENT OF Page 3 of 8 001.2018

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b. Duties and taxes for petroleum products subject to Fuel Fuel Marking Fee for petroleum products subject to Fuel Marking. their implementing rules and regulations. Marking shall be computed pursuant to existing laws and

c. All District and Port Collectors shall ensure that the volume allowance and Fuel Marking Fee are properly computed and paid prior to Fuel Marking.

4.2 BIR. Pursuant to Section 148 of the NIRC, as amended, the BIR manufactured petroleum product. For this purpose, the following shall collect the Fuel Marking Fees for locally refined or guidelines shall be observed:

a For payment of Fuel Marking Fee, the Refiner shall use the

VAT component as reference for the fuel company/owner in Fuel Marking Fee Form (FMFF). The form shall capture the recording the VAT upon payment of the Fuel Marking Fee

b. in the instance that the balance of Fuel Marking Fee as fuel to be marked, additional deposit shall be made prior to Fuel Marking. reflected in the FMFF is not enough to cover the volume of

c. A separate report shall be provided by the Excise LT Field or after 'the marking as a basis for monitoring/tax Operations Division (ELTFOD) specifying the Total Deposit and Actual Utilization to account for the balance of deposit administration purposes. and/or payable either prior to scheduled marking, if available

d. To ensure sufficiency of balance of fuel marking fees, the than 3-5 calendar days. manufacturers/ Refiners shall make a forecast of its removal corresponding to the amount of future removals for not less of finished petroleum products and provide sufficient deposit

4.3 The BOC and BIR shall commence collection of the Fuel Marking Fees on all manufactured, refined or imported petroleum products withdrawn and/or iodged beginning 4 September 2020

4.4 The Fuel Marking Fee shall be characterized as non-revenue collection, recorded as trust receipts and credited to the Fuel Treasury (BTr) pursuant to the DOF-DBM-COA Joint Circular No. 001.2018 dated October 2, 2018. Marking Trust Account to be maintained by the Bureau of

PRES CRIBING THE IMPLEMENTING GUIDELINES FOR THE COLLECTION AND DISBURSEMENT OF FUEL MARKING FEES PURSUANT TO DOF-DBM COA PERMANENT COMMITTEE JOINT CIRCUI AR BUREAU OF INTERNAL REVENUE Page4of8 001.2018

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computed as follows: SEcTiON 5. Computation of Fuel Marking Fees. In consideration of the biofuel requirements of Republic Act No. 9367, otherwise known as the "Biofuel Act of 2006," a volume percentage allowance shall be added to the Deciared Volume of the petroleum product to be marked. For this purpose, the Fuel Marking Fee shall be

5.1 For Gasoline: FMF= Declared Volume x 110% x Php 0.06884 (VAT inclusive)

5.2 FMF= Deciared Volume x 102% x Php 0.06884 (VAT inclusive) For Diesel:

5.3 For Kerosene: FMF= Declared Volume x Php 0.06884 (VAT inclusive)

SECTION 6. Payrnent to the Fuel Marking Provider. The BOC shall be responsible for payment of the amount due to the Fuel Marking Provider for Marking hundred eight-four hundred thousandths centavos per liter (P0.06884 per liter) for the second through the fifth year of the Fuel Marking Program. Services rendered based on the contract price in the amount of six thousand, eight

Joint Circular 001.2018. The payment shall be sourced from the Trust Receipt created pursuant to Section 148-A of the NIRC, as amended, in relation to DOF-DBM-COA Permanent Committee

amount due to the FMP for services rendered: For this purpose, the following documents shall be submitted for disbursing the

6.1. For processing of initial payment:

2 The following documents1' shall be duly indorsed by the Procurement Service-DBM to the Bureau of Customs: W Notice to Proceed/ Notice of Award, if any: Copy of the Approved Contract: 11

vi. Certified True Copy of Performance Security. if iv. PhilGEPS Posting (compiete) / Certification I V Transmittal of Documents to Commission on from PhilGEPS: any Audit (COA) (with checklist) duly received by Copy of Contract (TOR), if applicable: COA: or Terms of Reference

1 cf. Checklist of Documents to be submitted to Comptroller for Payment, Procurement Service- PhiIGEPS.DBM cf. COA Circular 20*2-001

PRESCRIBING THE IMPLEMENTING GUIDELINES FOR THE COLLECTION AND DISBURSEMENT OF FUEL MARKING FEES PURSUANT tO DOF-DBM-COA PERMANENT COMMItTEE JOINT CIRCULAR BUREAU OF INTERNAL REVENUE Nnmtt Page 5 of 8 001.2018

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b From the Fuel Marking Provider:

Approved detailed breakdown of the contract cost showing in sufficient detail the derivations of the direct and indirect cost, the cost/s and date/s of acquisition of the eguipment: and the list, quantities and costs of materials, spare parts, and supplies furnished by the contractor;

6.2. For processing of every Billing: a From the Fuel Marking Provider: iv. Notice of Postponement and Proceed, if any: 15 I iii. Monthly report on Field Testing with attached V Letter-request for payment: 12 Certificates of Marking1 Letter of Extension .of Deliveryl Waiver of Billing Statement/Monthly Penalty, if applicable: 15 Random Field Test and Confirmatory Results, if applicable; Marking Services rendered Report with on attached Test Fuel

b. From the BOc Technical Inspection and Acceptance Committee (TIAC): iii. Inspection I I v (ICAR);1 Inspection and Evaluation Report signed by Endorsements from the TWG/TIAC-BOC of the Inspection Certification and Acceptance Report TiAC 18 signed by the TIAC and Fuel Marking Program Project Implementation Office (FMP-PIO):1? andAcceptance Report(IAR)

detailed breakdown for payment

c. From the FMP-PIO: Certification that the marking covered in the submitted billing statements were witnessed by BOC:

12 Commission on Aucit (COA) Circular 2012-001: Prescribing the Revised Guidelines and Documentary Requirements for Common Government Transactions 18 bid 19 ibid Section VII! 1s cf. Checklist of Documents to be submitted to Comptroller for Payment, Procurement Service. Philgeps,DBM 16 (bid 1bid Ibid. Terms of Reference: Establishment and Operation of a Fuel Marking and Field Testing System.

PRESCRIBING THE IMPLEMENTING GUIDELINES FOR THE COLLECTION AND DISBURSEMENT OF FUEL MARKING FEES PURSUANT TO DOF-DBM-COA PERMANENT COMMITTEE JOINT CIRCULAR

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ii. Delivery Receipt signed by FMP-PIO:

d. if the Billing is for Marking Services under the jurisdiction of the BIR, the following shall likewise be submitted: i. Journal Entry Voucher issued by the BIR taking iii. BiR Validation Report and indorsement for iv. Delivery Receipt signed by BIR I Journal Entry Vouchers issued by the Bureau from the General Fund (BIR) to Fuel Marking the jurisdiction of BIR. The details of the billing up Fuel Marking Fees collected which is due Trust Fund (BOC): statements shall be reflected in said validation for transfer to the Fuel Marking Trust Account: of Treasury (BTr) taking up the fund transfer payment of the billing statements based on the actual fuel marking activity conducted within report;

6.5. 6.7. 6.3 6.6. 6.4. Purchase Order (duly received by the Fuel Marking Provider): 20 Amendment to Orderr Variation Order, if any:21 Other documentary requirements, if deemed necessary Bureau of Treasury (BTr) Certification; Notice of Cash Allocation (NCA) release from Department of Budget and Management;

SEcTiON 7. Separability Clause. -- if for any reason, any provision/s of this Order is/are declared invalid, such parts thereof not affected shall remain in full force and effect.

issuances, or parts thereof, which are inconsistent with this Order, are hereby repealed or modified accordingly. SEcTION 8. Repealing Clause. -- All orders, circulars, memoranda, and other

2o cf. Checklist of Documents to be submitted to Comptroller for Payment. Procurement Service- PhilGEPS,DBM 21 ibid

PRESCRIBING THEIMPLEMENTING GUIDELINES FOR THE COLLECTIONAND DISBURSEMENT OI FUEL MARKING FEES PURSUANT TO DOF-DBM-COA PERMANENT COMMITTEE JOINT CIRCULAR BUREAU OF INTERNAL REVENUE Page 7 of 8 001.2018

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SECTION 9. Effectivity. - This Order shall take effect immediately after its publication in a newspaper of general circulation.

CARLOS G. DOMINGUEZ Secretary of Finance 8 2020 1091

Recommending Approval:

108,0

Commissioner of Internal Bevenue K *: CAESAR R. DULAY 036466 REY LEONARDO B. GUERRERO X Commissioner of Customs 4

PRESCRIBING THE IMPLEMENTING GUIDELINES FOR THE COLLECTION AND DISBURSEMENT OF FUEL MARKING FEES PURSUANT TO DOF-DBM-COA PERMANENT COMMITTEE JOINT CIRCULAR BUREAU OF INTERNAL REVENUE RECORDS MGT.DIVISION NnnYYmd GCUI SEP, 04 2020 ep O TA 1 Page 8 of 8 001.2018