CEBU CITY – A trade organization in Cebu voiced strong objection against government’s abrupt change of policy requiring the collection of levied “back taxes,” which it fears might result to double taxation.

The Cebu Business Club (CBC), a group of prominent Cebuano businessmen and industry leaders, called the attention of concerned government agencies, especially the Department of Finance (DoF) to intervene and compel the Bureau of Internal Revenues (BIR) and the Bureau of Customs (BoC) to cease attempts in collecting “unfairly levied back taxes.”

“We, in the Cebu Business Club, an independent organization of businessmen and women and professionals in Cebu, have joined together to help make Cebu a better place to live in and do business,” stated CBC President, Gordon Alan Joseph in the group’s formal statement.

Joseph said CBC condemns government’s move to retroactively require Shell, one of the big three oil firms in the country, to pay for the importation of catalytic cracked gasoline (CCG) and light catalytic cracked gasoline (LCCG) that it uses as a raw material for the production of refined gasoline locally.

According to the CBC’s statement, in 2004, BIR Commissioner Jose Mario Buñag issued a legal opinion that the importation of the two products, being raw materials, is exempted from excise tax.

In 2009, BIR Commissioner Joel Tan-Torres reversed the Buñag ruling and agreed with the BoC that the two products were subject to tax.

Shell paid excise taxes for its finished gasoline products totaling more than P34 billion from 2004 to 2009.

Requiring the company to pay an additional excise tax amounting to P7.35 billion for the same years on its imported inputs will constitute double taxation – and a flip-flop on an earlier, validated ruling.

“Double taxation will only discourage local production and encourage direct imports of finished products in the present manner of Chevron, Total, and other independent players in the oil sector,” the CBC said.

Joseph said one of the major considerations that businessmen will factor in when choosing to commit to invest in a certain place would be “fair, consistent and predictable rules to follow” to enable them to determine the viability of their investments.

He asked, “If these rules are changed in the middle of the game, what signal will this give prospective investors in the country?”

In the Chamber’s statement, which was issued to media, Joseph underlined that “inconsistencies on the application of laws and rules discourage foreign direct investments (FDI) and inhibit the creation of new, badly needed jobs that will help lift many Filipinos out of poverty.”

The group hopes their sentiment will be heard by the DoF, and that the latter would successfully intervene and compel the BIR and BoC to cease their attempts in collecting these taxes in the spirit of the earlier rulings that confirmed the exemption of these products from taxes.

“The Philippines needs investments to fuel its growth and potential, and we need to have fair and consistent application of the laws of this land if we are to attract these investments into the country,” the CBC statement concluded.