Government may have lost P20 million due to undervalued flour shipment

MANILA, Philippines - The government may have lost P20 million in revenues because of undervalued wheat flour from Turkey, the Philippine Association of Flour Millers (PAFMIL) said yesterday.

In a statement, PAFMIL executive director Ric Pinca said that for 2009 and the first two months of 2010, instead of declaring an import value of $300 per MT. CNF (cost and freight) which is the value reference of the Bureau of Customs (BOC), these imports were declared at $96 FOB (free on board).

Import figures collated by PAFMIL showed that of the over 86,000 MT of flour imported from Turkey in 2009, some 19,000 MT are undervalued causing the government to lose around P16.9 million in revenues.

Likewise, from January to February this year, 6,000 MT of the 13,695 MT importation are undervalued, with government losing another P3 million in uncollected import duty and value added tax.

These losses do not include those incurred when the imported commodity is ”misdeclared” as something of lesser value and with less import duty, such as soybean meal which has zero duty and no value added tax.

Wheat flour has a seven-percent import duty and value added tax of 12 percent, PAFMIL said.

PAFMIL stressed that the undervaluation and misdeclaration are forms of technical smuggling.