BOC imposes higher duty on Southern Cross imports

The Bureau of Customs (BOC) has decided to impose a higher cement import duty on the cement imports of Southern Cross Cement Corp. (SCCC) made in February 2005. SCCC is a unit of the Taiheyo Cement Corp. of Japan.

The BOC Intelligence and Enforcement Group (IEG) recently recommended to the Office of the Customs Commissioner the rejection of SCCC’s declaration using the lower transaction value tariff rate in declaring the value of the shipment.

The BOC-IEG is recommending that the higher deductive method should be used to prevent undervaluation.

The BOC-IEG’s recommendation would result in the classification of SCCC’s imports as undervalue and would result in additional revenues for the government.

The BOC-IEG estimated that foregone revenue on the part of the government from the undervalued cement imports would be around P24 million.

Of the P24 million, P18 million is value added tax, while P6 million are customs taxes which SCCC waived by declaring a lower freight cost value.

The BOC-IEG recommendation reaffirms the earlier Value Reference Information System-Office of the Commissioner (VRIS-OCOM) recommendation to apply the deductive method as the alternative method for custom valuation in resolving valuation disputes.

More than a year ago in July, Bonifacio de Castro Juson, Philippine Chamber of Commerce and Industry (PCCI) commodity expert filed a complaint before the BOC-Investigation and Prosecution Division of the Customs Intelligence and Investigation Service (IPD-CIIS) against SCCC for, among others, undervaluation of bulk imported Portland cement.

The SCCC was investigated last year for allegedly hiding the real cost of its import shipment.

Presidential Anti-Smuggling Task Force Angelito Mendoza said that SCCC undervalued its import entry declaration for about 46,000 metric tons since February 2005.

With the BOC-IEG recommendation, SCCC must pay higher taxes for its imports and any new importations would be subject to close scrutiny.