Government asked to probe smuggling of Turkish flour

MANILA, Philippines - Flour millers yesterday asked the government to investigate the alleged smuggling of Turkish flour into the country.

The Philippine Association of Flour Millers (PAFMIL) submitted its report on flour smuggling incidents to the Office of the President last Tuesday, May 11. The documents were received by the President’s Review Committee on Smuggling and Tax Evasion Cases headed by retired Justice Perlita Tria Tirona.

PAFMIL Executive Director Ric M. Pinca said smugglers are becoming more aggressive, obviously unconcerned and unafraid of getting caught and penalized; and are undervaluing their imports even more to reduce payment of import duty and value added tax to insignificant amounts.

As a result, he said the government gets a pittance in customs collections while importers and their conniving partners share a much larger loot. Import duty for flour is seven percent with aalue added tax (VAT) of 12 percent collected at the port of entry.

PAFMIL estimated that the government lost some P50 million in foregone duties and taxes in 2008 and 2009 from undervalued flour imports.

Pinca explained that there are four ways by which flour is technically smuggled. The most common is through “undervaluation” or declaring a lower import cost; declaration of lower weight of imported goods; warehousing or falsely declaring that the imported commodity is for reprocessing and reexport which exempts it from duties and taxes; and misdeclaration or declaring the imported goods as another item of zero or lower duty.