The understated proceeds are said to amount to Php53 billion because contractors Shell Exploration, Chevron and PNOC have been deducting their corporate income tax from the government’s 60%-share of the gas project since

Research group IBON urges the Aquino government to demand the service contractors of Malampaya Gas Project to immediately pay the Philippine government its share of the project’s income and refund the amount of taxes that the government practically paid on their behalf.

The understated proceeds are said to amount to Php53 billion because contractors Shell Exploration, Chevron and PNOC have been deducting their corporate income tax from the government’s 60%-share of the gas project since 2004. IBON notes that ironically, these lost revenues occurred during the period when Filipino consumers were reeling from sky-high prices of petroleum while the economy faced huge budget deficits.

The research group welcomed the report made by the Commission on Audit (COA) on the Department of Energy which stated that Malampaya contractors should not be exempted from paying its corporate income tax and should directly pay these to the Philippine government.

IBON added that government should immediately review the severely unfair service contract with Shell and Chevron. The contract has already showered these foreign firms with innumerable perks and exemptions through the service contract. For instance the contractors are exempted from various Philippine taxes and laws except income taxes. They also enjoy duty-free importation and repatriation of profits and capital investment, among others.

According to the group, these exemptions reveal how government has abandoned its constitutional duty and right to fully control and supervise the Malampaya project for the sake of national interest. It also urged government not to blindly enter into contracts that only abuse the country’s natural resources without due regard to people’s interest and national patrimony. (end)