RP loses P100B/yr on tech’l smuggling

The government is losing P100 billion a year due to undervaluation and underdeclaration of imported products passing through the Bureau of Customs (BOC).

Federation of Philippine Industries Inc. (FPI) President Jesus L. Arranza said the report of the International Monetary Fund (IMF) and BOC do not match.

From 1999 to 2006, the IMF said imported products that entered the country amounted to $321 billion. However, the BOC only recorded the entry of $245.6 billion worth of imported products.

Arranza said this puts the disparity at $76.29 billion for eight years.

Because of this, Arranza urged the BOC to be more vigilant in monitoring cargoes that enter the country.

Arranza noted that the P100 billion losses per year is because of the technical smuggling. Technical smuggling, which means misclassification and undervaluation of imported products, represents 90 percent of smuggling activities in the country.

For this year, Arranza said the government could earn P40 billion additional revenue if closer monitoring is pursued against technical smuggling.

 Arranza identified steel, ceramic tiles, garments, plastic resin, electrical supplies and sanitary wares as industries that should be closely monitored.

 FPI has entered into an agreement with the Bureau of Internal Revenue (BIR) to check technical smuggling. According to Arranza, they will supply the BIR documents that will allegedly expose importers who may be classified as tax evaders because of undervalued products.

 Arranza said the BIR will conduct their own investigation. The FPI will merely provide the paper trail that would aid in the investigation and may eventually be used for potential cases filed against the perpetrators.

According to Arranza, the practice of reporting undervalued goods in order to evade taxes is prevalent. This, he said, deprives the government of much needed revenues that tariff and taxes are supposed to bring.

In addition, he said these scheme results in unfair competition between local manufacturers and importers. Arranza said there are several steel coil importers that are under investigation.