BOC urged to tighten screws on undervalued shoe imports

The Samahan ng Magsasapatos sa Pilipinas (SMP) is urging the Bureau of Customs (BOC) to adopt stricter measures in monitoring the entry of undervalued shoe imports.

The SMP noted that the BOC has a "three-lane"system color-coded as the green, yellow and red. The green lane is for unrestricted entry without the need to present documents or undergo physical examination by a customs examiner.

The yellow lane requires importers to present pertinent documentation attesting to the value of the goods and the payment of corresponding duties and taxes.

The red lane, on the other hand, requires the submission of full documentation and physical examination by a customs examiner.

The SMP has been able to score a minor victory in its campaign to stop the current unrestricted entry of undervalued footwear imports.

The BOC recently stopped the unrestricted entry of 40 TEU (twenty-foot equivalent unit) containers. However, the BOC is only seeking documentation of the imports.

The SMP is lobbying that the BOC go one step further and conduct a physical examination to determine if the actual imports match the declared value.

The SMP had earlier revealed that government may have lost around P14 billion in taxes and duties from undervalued footwear imports since 1997.

According to the SMP, the government has long neglected the local footwear industry, allowing imports (primarily from China) to dominate the market.

Unfortunately, the SMP complained, the government has not ensured that the proper taxes and duties on such imports are collected.

This is due to the fact that the BOC relies only on submitted values presented by the importers without comparing them to independently gathered data.

Government, the SMP said, should require its trade attaches abroad to gather such data for use by the BOC.

Based on an industry study, the SMP showed that in 1997, total imports of footwear amounted to 28.242 million pairs with a declared value of $75,927 million.

Government data showed that while the import quantity has steadily grown from 1997 to 2001, an increase of 212.79 percent, the value of the imports has decreased by 70.52 percent. By 2001, imports of footwear increased to 60.098 million pairs, but its declared value fell to $53.545 million.

Citing a specific example, the SMP said a dress footwear with outer soles and leather upper are being declared at an average price of $0.76 or about P50.

That kind of valuation, the SMP argued, is unbelievable and is a clear case of undervaluation.

Latest figures gathered by the SMP from the National Statistics Office (NSO) further show that total imports from 1997 to the present has reached 264.474 million pairs with a declared import value of $37.144 million.

Aside from undervaluation, the SMP said, cheap imports are being dumped by China in the county with the intent of killing the already dying local footwear industry.

The SMP is appealing to the government, that while the footwear industry is considered a sunset industry, its demise would still displace no less than 300,000 workers.