Billions of pesos lost on underpayment of duties on imported luxury vehicles

The government has lost billions of pesos in revenues over the past three years due to "self-imposed" taxes and duties on the importation of thousands of luxury vehicles, a Customs official disclosed yesterday.

The official, who spoke on condition of anonymity, said that the practice of basing the release of the vehicles from the Customs zones on the certificate of Authority to Release Imported Goods (ATRIG) issued by the Bureau of Internal Revenue (BIR) was in itself "a condonation of technical smuggling."

"This was how the government lost billions of pesos in revenues as the "Blue Book," a compilation of updated value and model of vehicles, was completely ignored in favor of ATRIG. Had the book been consulted as in the past, the correct taxes and duties could have been collected by the government," the official stressed.

He also said that three appeared a strong suspicion of conspiracy between certain officials of the BIR and Customs to change the rule on transaction value of imported goods by using ATRIG which had caused the government billions of pesos in lost revenues.

The release of questioned luxury vehicles was completely assigned to the Vehicle Importation Monitoring and Compliance Unit (VICMU) and was then headed by lawyer Ramon Balite, whose appointment as technical adviser lapsed a few months ago.

Customs insiders revealed that the issuance by the BIR of ATRIGs was based mostly on the declared value of imported vehicles by their importers rather than the value contained in the Blue Book which represents the correct and actual value of an imported car, including its model.

From the value of an imported car contained in the Blue Book for American vehicles and Japanese Book for Japanese-made cars, the Bureau of Customs could have had the basis for imposing the right levy on the thousands of luxury vehicles brought into the country, said the same official.

He also said that President Arroyo hit the nail on the head when she disclosed in her speech the other day at the Manila Overseas Press Club-Tuesday Club press forum that the government had lost hundreds of billions of pesos in technical smuggling through misdeclaration and undervaluation of goods.

Customs Commissioner George Jereos, who was apprised of the graft-ridden VICMU, unceremoniously transferred the operations of the unit under Deputy Commissioner Ray Allas, head of the Customs Intelligence and Investigation Group (CIEG).

Allas ordered an inventory of the records of the vehicles that were released on the strength of the ATRIGs, although he admitted that it would practically be impossible to run after the questioned vehicles for deficiency in payment of taxes and duties.

Several records of ATRIG-released luxury vehicles have been deliberately erased from the master computer in the VICMU.