Measure seeks to tag P50-M illegal importation, exportation as ‘heinous crime’

MANILA, Philippines - Illegal importation and exportation of goods with an appraised value of more than P50 million will be considered a heinous crime under the proposed Customs Modernization and Tarriff Act (CMTA).

The measure, which will replace the Tariff and Customs Code of the Philippines, is seen to bring the Philippines at par with global customs administration standards and curb smuggling.

The Department of Finance is once again lobbying  for the immediate passage of the CMTA to help boost government’s collection of taxes and dues and promote faster, efficient and transparent trade transactions.

“The Bureau of Customs collected P369.3 billion in 2014, 21 percent higher than what was collected in 2013 on the back of painstaking reforms and plenty of hard work. But our work is far from over. CMTA will etch further reforms into law and enable us to institutionalize the ongoing transformation of the (BOC)into an efficient and responsive revenue agency,” Commissioner John P. Sevilla said in a statement.

Finance Undersecretary Carlo A. Carag of the Revenue Operations and Legal Affairs Group said the modernization and policy changes to be institutionalized with CMTA will allow the BOC to sustain if not break records in terms of collections.

 “ We intend to further transform the BOC from what was once perceived as one of the most corrupt and underperforming agencies into a pioneer of governance innovation and technology in the region,” Carag said.

CMTA will make the Philippines compliant with the Revised Kyoto Convention (RKC) and other international agreements, and consistent with the trend towards harmonization, modernization and simplification of customs procedures. It  will mandate the use of Information Communications Technology (ICT) to enhance customs operations and enforcement, consistent with the government’s policy to eradicate corruption by eliminating face-to-face transactions and institutionalizing electronic systems instead.

It also seeks to increase the penalties for violations of the provisions of the bill as the existing schedule of fines are way outdated.

The proposed bill will also provide a de minimis value of P5,000 so that incoming goods with a value of P5,000 and less will be exempt from duties.

Apart from these, the CMTA will exempt relief consignments from duties and taxes and enable a simplified customs procedure for efficient release of goods when there is a declaration of a state of calamity. 

To develop the BOC’s capacity for trade facilitation, the principle of an Authorized Economic Operator (AEO) as drafted by the World Customs Organization is adopted in the proposed bill.

An AEO refers to importers, exporters, customs brokers, forwarders, and other entities duly accredited by the Bureau based on international standards and various national best practices, and which are entitled to minimal requirements for processing of goods.

Further, the proposed bill recognizes the use of self-certification system in determining the applicable rules of origin.