Government loses P582M/yr due to steel smuggling – FPI

The Federation of Philippine Industries (FPI) said the government is losing P582 million a year in potential tax revenue because of steel smuggling.

FPI president Jesus L. Arranza said the government is losing money each year because steel products are entering the country illegally.

The amount is based on the estimated 40,000 tons of hot-rolled mild steel plates, 50,000 metric tons of hot-rolled coils and 20,000 metric tons of steel beams that were smuggled into the country yearly.

Arranza said that the private sector, led by FPI is now in close coordination with the Presidential Anti-Smuggling Group (PASG).

The group will monitor identified importers, forwarders and customs personnel who are believed to be involved in smuggling activities at the Harbour Centre in Manila.

According to Arranza, they have already identified the perpetrators and have submitted their names to PAGC. Likewise, he said they have turned over to the authorities documentary evidence linking customs official to the illegal entry of an estimated 6,000 tons of steel beams and sheets.

Arranza explained that the trailer-long steel beams and sheets entered the Manila port listed under “warehousing entry.”

This means that the beams and sheets will not be used in Manila. They will only be stored in custom bonded warehouses for re-processing. The beams will eventually be re-exported.

Because the items were classified as such, the steel beams and sheets were not meted with the 12-percent value added tax and the mandatory seven-percent duty.

Arranza said they suspect that the steel products will just be brought to the end users or traders without the necessary taxes getting paid because the importers still have not shipped out the steel beams and sheets.

Arranza said several steel importers who are being cheated by unscrupulous steel importers have already sought their help and are willing to testify against the tax cheats.