New Customs system to be put to the test in May

The Bureau of Customs (BOC) will be put to the test next month as they begin verifying the performance and compliance of "super green lane" importers.

Under the procedure devised by the bureau, importers are now classified into three "lanes"; super green, yellow, and red. Those in the "super green" group, numbering 118, will be allowed to move their goods out of Customs with minimal documentation and inspection requirements. Yellow and red lane importers will have to contend with stricter procedures.

At the heart of the scheme is the system by which Customs will verify the transaction values presented by the importers for the determination of the proper duties. The Philippines has shifted to the transaction value, which includes the invoice price as well as the freight and shipping charges, as the basis for the imposition of import taxes. Therefore, if BOC wants to challenge the importer's declaration, it will have to put up its own basis for the valuation.

Sen. Juan Ponce Enrile of the Senate's ways and means committee has asked how 60 people from the bureau can check an average of 365,000 import entries each year.

Importers found to be misdeclaring valuations will have to be demoted to the yellow or red lanes, observers noted, otherwise the credibility of the whole system will be in question. Failure by the Customs bureau to penalize misbehaving importers may result in revenue leakages as importers will begin undervaluing the transaction value of the goods they bring in. Acting Custom Commissioner Ampil has stated many times that the BOC is ready for the challenge.

However, observers have pointed out the primary challenge for this system: Customs will need a database of reliable and up-to-date prices with which to compare the importers' invoices and sufficiently trained manpower to do the task. Verifying the transaction value will be difficult as government will have to contend with the hundreds of thousands of types of goods entering the country each year, whose prices depend upon constantly changing market conditions abroad.

Failure to implement the color-coded lane system effectively and the revenue loss could bring to reality the dangers cited by Enrile, with the consequent effects on the Bureau of Customs and the country's revenue targets.