Carmakers hail DOF task force versus smuggling

The automotive industry welcomed yesterday the establishment by the Department of Finance (DOF) of an inter-agency task force to combat smuggling of vehicles into the country.

Serafin M. Pantaleon, senior vice president of Toyota Motor Philippines Corp., a good move especially at a time when the National Government is starving for much-needed revenues.

"The industry welcomes the initiative as it would be good for the country’s automotive industry and that would result in more revenues (for the) government‚" Pantaleon said during the formal launching of Vios, its newest addition to the passenger vehicle market.

Pantaleon is also the secretary general of the ASEAN Automotive Federation.

Based on government and private sector data, roughly 40 percent of the country’s automotive sales comes from the informal or grey sector which includes imported secondhand vehicles, locally-assembled jeepneys and smuggled vehicles.

The roster of vehicles registered with the Land Transportation Office (LTO) reflects a huge discrepancy between new automobile registration and the sales figures of the country’s automotive industry.

That means the government is losing substantialy revenues in the form of uncollected taxes, automakers said.

In 1997, Toyota Philippines total sales stood at 166,000 units. As of end December 2002, only about 85,000 units were sold.

In the ASEAN region, practically all the countries have recovered in terms of automobile sales since the Asian financial crisis.

Pantaleon said that based on the federation’s data, Malaysia’s automotive industry recovered by an average 127 percent. The Philippines, however, only recovered 53 percent compared to the pre-Asian financial crisis in 1997.

"The Philippines could have recovered fully if not for the so-called ‘grey area’including smuggling‚" he added.

Recently, Finance Secretary Jose Isidro Camacho ordered a tighter monitoring of the operations at the Subic Bay Freeport Zone and the port of Cebu, especially focused on the entry of imported vehicles, which were reportedly ferret-out of the economic zone areas without paying the proper duties and taxes.

Operators at the export processing zones were granted the authority to import vehicles provided these are used within the premises. If these vehicles are taken out of the zones, the importer-operator is required to payBOC the proper duties and taxes on imported cars.

Camacho will chair the task force while its members are Customs Commissioner Antonio M. Bernardo, Finance Undersecretary Grace Tan, Finance Assistant Secretary Emmanuel Bonoan and Undersecretary Miguel Coronel of the Anti-Smuggling Intelligence and Investigation Center (ASIIC).