The Market Monitor Minding the Nation's Business
Luxury cars, oil and cigarettes appear to be the top sources of revenue leaks, estimated at more than P50 billion a year, or almost 10.68 percent of the annual revenue target of the Bureau of Customs of (B0C) P467.50 billlion.
Angered by these findings, Customs Commissioner Nicanor Faeldon directed the bureau’s intelligence and investigation service to dig deeper into the reports of the rampant smuggling of the three products, and the entire BOC to step up efforts to curb smuggling activities.
Faeldon said oil smuggling was common through pilferage, such as siphoning off oil from tankers to barges in the high seas and then to oil trucks on land delivery to depots that result in huge losses of government revenues.
Luxury-vehicle smuggling, on the other hand, is carried out through declaration, misclassification, and undervaluation while cigarette smuggling robs the government of revenues from non-payment of duties and taxes, aside from the use of fake tax stamps.
BOC data showed that oil smuggling results in the agency losing yearly an estimated amount of P22.5 billion; 16 billion from illegal cigarette sales; and an estimated revenue leak of P21 billion in vehicle smuggling.
The revenue losses from these three commodities contribute to the almost $3.85 billion (P165.5 billion) revenue loss from smuggling yearly, or 35.4 percent of the current annual revenue target, according to BOC records.
Faeldon said “mis-invoicing,” underdeclaration, and overdeclaration, of goods are the prevalent malpractice among smugglers. He said BOC has a list of companies that are suspected of being engaged in oil, motor vehicles (including high-end importers), and cigarette smuggling. As of January 27, BOC has listed 13 importers whose accreditations are scheduled for suspension this month.
These are are Imax Harbor International Trading Corp., Aldelgoy Trading, Bgc Primahora Enterprise, Coco Technologies Corp., Empresario Trading, Eurofoods Philippines, Inc., Grandeur International Motorcycle Ltd., Inc., Global Four International Trading, Inc., Kim-Kerr Enterprises Corp., Ramado Trading, Richco Marketing, Uni-dravo Commercial Corp., and U-bix Corp.
These importers have had their shipments seized or forfeited at the Port of Manila and have supposedly violated Customs rules and laws. A total of 25 importers and six customs brokers, meanwhile, were issued show-cause orders and asked to provide BOC with a satisfactory explanation as to why their accreditation should not be suspended.
These importers and customs brokers allegedly violated Customs rules and laws, and also have government-seized shipments. BOC also listed 23 importers and 40 Customs brokers who are prohibited from reactivating their expired accreditation due to their unsatisfactory explanation relating to their warrant of seizure and detention (WSD) issuances.
Faeldon said BOC is reviewing the list of accredited importers and Customs brokers as part of a drive to delist or suspend erring ones starting this year.
On January 13, BOC announced an initial list of 71 importers–some of them publicly listed companies–and their Customs brokers that had their shipments seized at the Port of Manila and the Manila International Container Terminal, and are under investigation for possible violation of Customs laws.
“We are ready to use all available options in the probe against erring companies to make sure we control all forms of revenue leaks,” Faeldon said.
“It will never be an easy task for us, but we will toil hard through sweat and blood, only to make sure that we do our jobs in our faithful compliance with our mandated tasks as public servants,” Faeldon said.
The BOC recently reported a 101-percent collection, compared to its January revenue target. Tax takes in the month reached P35.745 billion and surpassed its revenue target of P35.509 billion.
In a preliminary report, the BOC’s Financial Service (FS) disclosed that the January collection was also 115 higher than the cash collection of P31.08 billion in 2016.
LUIS LEONCIO