Significant changes in the importers and customs brokers accreditation process

The Bureau of Internal Revenue (BIR) has recently issued Revenue Memorandum Order (RMO) No. 33-2014, which prescribes policy changes relative to importers’ securing the necessary Importer’s Clearance Certificate (ICC).  We may recall that early this year, the Department of Finance (DOF) introduced significant changes in the customs accreditation of both importers and customs brokers when it issued Department Order (DO) No. 012-2014 on Feb. 6, 2014.

DO No. 012-2014, in essence, requires importers to undergo a two-phase accreditation process, first with the BIR and then with the Bureau of Customs (BOC).  The order was issued in furtherance of the DOF’s efforts for complete tax mapping of businesses and ensure maximum productivity of the concerned bureaus. As such, importers now have to satisfy the requirements of both the BIR and the BOC to be able to eventually import goods into the country. Consequently, this has forced importers all over the Philippines to prove that they are engaged in legitimate business and that they are paying the proper taxes. 

In order to implement the said department order, the BIR then issued Revenue Memorandum Order (RMO) No. 10-2014 which prescribes the policies, guidelines and procedures in the accreditation of importers and custom brokers and the revocation thereof. Only importers and custom brokers who are able to satisfy the accreditation criteria set forth by RMO No. 10-2014 would be issued the necessary BIR Importer Clearance Certificates (BIR-ICC) and BIR Customs Broker Clearance Certificates (BIR-BCC) which must then be presented by the importers and customs brokers to the BOC for their BOC accreditation under the rules and regulations issued by the BOC.

Under the new rules, BIR-ICCs and BIR-BCCs would be valid for a period of three years from the date of issuance and importers would no longer be required to annually renew their BOC-importer accreditation, thereby extending the validity period of the accreditation granted to importers and brokers. However, notwithstanding this extension, importers actually face more complex requirements and processes in applying for BIR accreditation.

Since the implementation of the said RMO, importers and brokers have flocked to the BIR to secure their respective BIR-ICCs and BIR-BCCs in the hope that the new regulations would not hamper their individual business operations. As a result, the Accounts Receivable Monitoring Division (ARMD) may be hard-pressed to adequately handle the influx of applications due to manpower limitations. The ARMD has even issued an advisory acknowledging the fact that the delay in the release of the BIR ICCs/BCCs is due to limited personnel and have thus provided a schedule for follow-ups based on the date of application. The schedule for a mere follow-up is even way beyond the 15-day period within which an applicant may expect the release of the BIR-ICC/BCC as provided by the RMO.  This has caused a number of applicants to conduct a step-by-step follow-up of the concerned offices in order to expedite the release of their ICC/BCC since without a BIR-ICC/BCC, the applicants cannot to proceed to the next step, which is the application for BOC accreditation.  And without BOC accreditation, they are not allowed to import of goods into the country.

To facilitate the processing of ICC and BCC applications, the BIR, then issued RMO No. 33-2014 amending the policies, guidelines and procedures in the issuance of Importer’s Clearance Certificates and Customs Broker’s Clearance Certificates relative to the accreditation as importer/customs broker.

Policy amendments

Following the issuance of the said RMO, customs brokers with no trade names are no longer required to present a certified true copy of business name registration upon registration with the BIR. However, applicants which are Board of Investment (BOI)/Philippine Economic Zone Authority (PEZA) - registered entities or those located at Freeport or special economic zones enjoying tax incentives are now required to submit their respective Certificates of Registration issued by concerned Investment Promotion Agencies, in addition to the regular requirements.

Moreover, applicants for ICC or BCC which are newly registered with the BIR or one which has never been accredited by the BOC as either importer or broker are required to submit printer’s delivery receipt and proof of filing of tax returns through the BIR’s electronic filing and payment system (eFPS) for at least two consecutive months. Proof of single importation is no longer required from applicants who are considered as new importer/customs brokers.

Individual applicants with severe medical condition are now allowed to be represented by their appointed “attorney-in-fact”, supported by a duly notarized “Special Power of Attorney” and a medical certificate issued by the attending physician under oath, endorsed by any government physician.

Further, the said RMO defines “authorized officer of the non-individual applicant” as any of the officers listed in the corporation’s latest General Information Sheet (GIS) filed with the Securities and Exchange Commission (SEC). However, in the event that the board authorizes any person other than those indicated in the GIS, that person shall be required to execute a sworn statement that he/she shall be likewise jointly or severally liable or responsible in the event that problems arise concerning the filed application.

Revised procedures in the issuance of provisional ICC/BCC

Without a BIR ICC/BCC, an importer or broker would not be allowed to apply for BOC accreditation. Thus, the said RMO also revised the procedure in the issuance of provisional ICC/BCC. Importers and customs brokers included in the list provided by the BOC as of February 2014 and were able to file their applications on or before July 31, 2014 would be qualified to be issued a provisional ICC/BCC as long as the minimum criteria set forth by the BIR have been satisfied. As such, pending the release of a BIR ICC/BCC, qualified importers and brokers may apply for BOC accreditation using the issued provisional ICC/BCC. However, it would still be the responsibility of  importers/brokers to initiate the verification from the concerned offices if they satisfied the criteria provided under RMO No. 10-2014, as amended, to ensure the issuance of a regular ICC/BCC before the expiration of the six-month validity period.

At the end of the day, for an importer/broker applicant to get a BIR ICC/BC, any and all its tax liabilities which are considered by the BIR as delinquent and/or receivable have to be settled.  Clearly, the aggressive efforts of the DOF, through the BIR and the BOC in tax mapping and determining tax compliance of businesses have and will continue to result in a considerable increase in revenue collection. 

The aim of the DOF along with the BIR and the BOC may be commendable, since it endeavors to minimize, if not eliminate, irregularities in import practices by giving the privilege of importation only to those who are compliant with the law. However, it must be remembered that changes in administrative processes must always be reasonable and not unnecessarily burdensome so as not to adversely impact compliant taxpayer-importers and thereby become stumbling blocks to the growth of our economy.

Monica D. Calimbas is a supervisor from the tax group of R.G. Manabat & Co. (RGM&Co.), the Philippine member firm of KPMG International.

This article is for general information purposes only and should not be considered as professional advice to a specific issue or entity.

The view and opinions expressed herein are those of the author and do not necessarily represent the views and opinions of KPMG International or RGM&Co. For comments or inquiries, please email [email protected] or [email protected].

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