Government tightens CBW rules to stem smuggling

The Department of Finance is consolidating all rules on Customs bonded warehouses (CBW) as part of efforts to curb the problem of rampant smuggling in the country.

A Finance official said the department and the Bureau of Customs will soon be coming out with a new Customs Administrative Order that would consolidate all the rules governing bonded warehouses.

The main goal is to make the process of using these bonded warehouses stricter yet more efficient. 

Some of these so-called Customs bonded warehouses have been found to be repositories of all sorts of smuggled goods.

“We will now consolidate the rules on these bonded warehouses. We will make the rules stricter,” said Finance Undersecretary Estela Sales.

For example, she said that if an importer wants to bring in raw materials from other countries he would only be allowed to import a certain quantity of the materials.

Sales said smuggling happens when importers enter the raw materials at zero duties and try to divert it to the domestic market.

The Finance official said one of the major provisions of the new order would be to limit the amount that importers are allowed to store in these bonded warehouses.

Sales said the new rules would also mandate for stricter post-entry audit of goods by the BOC and the Bureau of Internal Revenue (BIR), in such a way that their data would be synchronized.

The government hopes to release the order within the next two weeks, Sales said.

“This is one way to plug smuggling in the country,” she said.

The BOC, the government’s second largest revenue earner, has been stepping up efforts to boost collections.

It has surpassed its September collection target by P1.441 billion due mainly to non-cash revenues from the rice importation requirements of the National Food Authority (NFA) during the period, latest data from the agency showed.

The BOC collected P23.996 billion in cash and non-cash revenues for September, above the target for the month of P22.555 billion, according to preliminary data from the agency.

The P23.996 billion generated during the month was P4.934 billion or 25.9 percent higher than the P19.062 billion collected in the same period last year, data also showed.

Cash revenues of the BOC come from tariffs or duties paid by importers to the agency for goods entering the country while non-cash items come from the tax expenditure funds (TEF) of government-owned and controlled corporations (GOCCs) and state-run agencies.

The so-called TEF is a subsidy released by the Department of Budget and Management (DBM) to GOCCs and state-run companies mainly to settle customs duties and other taxes arising from the importation of goods.

Of the P23.996 billion, the cash revenues for the month amounted to P18.972 billion or P2.756 billion lower than the target of P21.728 billion.

Non-cash revenues, on the other hand, amounted to P5.023 billion, way above the target for the period of P827 million.