RR No. 8-2006: Prescribes the implementing guidelines on the taxation and monitoring of the bioethanol-blended gasoline (E-gasoline) and the raw materials used in the production thereof pursuant to the Fuel Bioethanol Program of the Department of Energy

Key points

1. Accreditation and permit. A person who blends unleaded gasoline with fuel bioethanol must hold a DOE accreditation certificate as Oil Industry-Participant and a valid BIR Permit to Operate. Only such participants, registered for Excise Tax, may import or buy local fuel bioethanol for making E-gasoline.
2. Product standard and excise rates. Only pure anhydrous bioethanol with alcoholic strength of more than 99% may be used. It qualifies for the Excise Tax rate of P 0.05 per liter only if denatured before release from customs or removal from the place of production, and otherwise the applicable Tax Code rates apply. E-gasoline is not taxed again if the excise on the fuel bioethanol and unleaded gasoline was paid, and gains on E-gasoline from storage and in-transit delivery are taxed at P 4.35 per liter.
3. Importation and denaturing. Each importation needs a Permit to Import, storage in a customs bonded tank, a laboratory test witnessed by the participant, DOE, BIR and BOC, and an Authority to Release Imported Goods (ATRIG) before release. Denaturing is done with unleaded gasoline within 48 hours after unloading, on written notice at least 3 working days ahead.
4. Denaturing formula and Bitrex. The formula adds 1.96% to 2.44% unleaded gasoline to every 100 liters of bioethanol, and other formulas need DOE endorsement and BIR approval. Until domestic supply is available as the DOE determines, imports containing 0.4 grams of denatonium benzoate (Bitrex), or 4 parts per million, per 100 liters are allowed, with a separate importer’s bond and further denaturing.
5. Local distilleries and dehydration. Local distilleries supplying the Program need a DOE accreditation certificate, sell only to accredited participants, pay the P 0.05 per liter excise before removal, and post a surety bond. Sales of bioethanol for dehydration need a Permit to Operate for the plant, separate permits for conditional removal, and a joint bond.
6. Marker dye, tanks and reports. A marker dye must be blended into fuel bioethanol, and its absence is prima facie evidence of no prepayment of excise. Participants keep at least 3 storage tanks (or 2 for on-line blending), calibrated every 6 months, with a Revenue Officer On-Premise assigned. Monthly liquidation statements and ORB transcripts are due within 8 days after the month, and DOE report copies go to the Chief, LTFOD within 5 days from DOE receipt.

Who is affected

• Oil Industry-Participants accredited by the DOE
• Local distilleries supplying fuel bioethanol
• Owners or operators of dehydration plants

Deadlines and effectivity

• Denaturing of imports: within 48 hours after unloading
• Monthly liquidation statement and ORB transcript: within 8 days after the month of operation
• Excise on E-gasoline gains: within 5 days after the month of operation