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Shell Gets $567 Million Philippine Smuggling Complaint, Will Face Probe

Bloomberg

By Francisco Alcuaz Jr. – Oct 14, 2010

The Philippines filed a 24.5 billion peso ($567 million) smuggling complaint against the local unit of Royal Dutch Shell Plc, saying it was shifting its drive against tax evasion “to a much higher gear.”

Pilipinas Shell Petroleum Corp. evaded 2.72 billion pesos of excise and value-added taxes by misdeclaring and misclassifying 52 shipments from 2005 to 2009, the Bureau of Customs said in a statement. It said it was seeking the maximum fine of 800 percent, or 21.8 billion pesos, on top of this.

The bureau filed the complaint with the Department of Justice, which will conduct an investigation before filing any case in court. Shell spokesman Roberto Kanapi said he had just learned of the filing and couldn’t immediately comment.

Shell, one of two oil refiners in the Philippines, is the biggest company included in President Benigno Aquino drive against tax evasion and corruption. The tax and customs bureaus have filed complaints with the justice department every week starting in July, after Aquino took office vowing to fight poverty by battling corruption. The justice department hasn’t completed its investigation of any of the complaints.

The government says it loses as much as 250 billion pesos a year to tax evasion. It forecasts this year’s budget deficit will widen to a record 325 billion pesos. The budget was already in deficit for 21 of the last 25 years.

To contact the reporter on this story: Francisco Alcuaz Jr. in Manila at falcuaz@bloomberg.net

To contact the editor responsible for this story: Clarissa Batino at cbatino@bloomberg.net

SOURCE

RELATED: Royal Dutch Shell Plc Tax Dodgers: offshore – and out of reach to the Revenue: 3 February 2009

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