BOC urged to buy undervalued imports and sell them to public

MANILA, Philippines –  The Federation of Philippine Industries (FPI) has urged the Bureau of Customs (BOC) to purchase all grossly undervalued imported products and then sell them to consumers to increase go-vernment revenues.

In an interview after the first Anti-Smuggling Summit last Friday, FPI chairman Jesus Arranza said the government should buy the smuggled goods and sell them to the public in order to make a pro-fit. This is one of the recommendations drawn up during the summit. Arranza said the BOC must exercise its right of compulsory acquisition to buy grossly undervalued importations to deprive unscrupulous importers of illegal gains.

Aside from the additional revenues from the government, Arranza said this will also protect local manufacturers from unfair competition.

Based on International Monetary Fund (IMF) data, total exportation to the Philippines from 2002 to 2007 amounted to $284.70 billion while the BOC’s import records only showed $195.01 billion, or a disparity of $89.69 billion.

Therefore, the average annual disparity is $14.95 billion or the equivalent of P747.50 billion at the rate of P50 per $1. Applying the 12 percent VAT and an average duty of five percent will result to a total revenue loss of P127.075 billion per annum.

Arranza said there is an urgent need for all stakeholders to band together and fight smuggling in order to strengthen industry and agriculture, save jobs and create employment, and protect the eco-nomy.

At the same time, Arranza said the BOC should publish in its website updated reference values for every description and tariff heading as required by the Ta-riff and Customs Code to guide the BOC as well as importers in all ports of entry regarding the value range of all articles being imported.

He said that until there are uniform valuations at every port, all importers should be required to use ports that are nearest their place of business domicile except when serving customers located near the ports which they intend to use. In the latter case, clearance from the BOC Commissioner must be obtained, to avoid “forum shopping” by importers.

Arranza also said the BOC must be able to broaden and expand its post entry audit capability by allowing it to contract qualified private auditing firms to undertake such audits subject to compensation based on positive findings. This will allow quick releases of importations and declog the piers, while remedying the present limitations of the BOC to audit only one to three percent of all importations.

Also, he proposed the creation of special courts, similar to those handling drug cases, that will hear all smuggling cases and will be trained to handle smuggling cases competently and decisively.

At the same time, seized goods should be fully destroyed except for agricultural and food products fit for human consumption which are donated for charity. This is to disallow auctions subject to irregularities which result in the release of undervalued or substandard goods detrimental to the public and unfair to the local manufacturers.