New tariff law to boost BOC collection capability

MANILA, Philippines - The newly signed Customs Modernization and Tariff Act (CMTA) will streamline personnel of the Bureau of Customs (BOC) and cut down the process of releasing imported shipments, Commissioner Alberto Lina said.

Meanwhile, Presidential Communications Operations Office Secretary Herminio Coloma Jr. said the CMTA or Republic Act 10863 would boost the capability of the BOC as one of the top two revenue-generating agencies of the government and the Philippines’ competitiveness in global trade.

President Aquino signed the bill on May 30, which is a consolidation of House Bill 5525 and Senate Bill 2968 passed by the House of Representatives and the Senate on Feb. 2.

Lina said aside from the higher tax-free benefits that overseas Filipino workers (OFWs) would enjoy when bringing in balikbayan boxes, the new law would also instill changes in the bureau’s structure and operations.

The BOC chief, who succeeded in lobbying for the passage of the CMTA, said the law would not lead to the abolition of the agency, but might trigger a streamlining of procedures and personnel, especially since they intend to shift to automation.

“There would be units that would be merged or abolished because when you automate, something would be left behind. There would be functions that would have to be absorbed by others. That is just the way it is,” Lina explained.

Under the law, the tax exemption for gift packages or balikbayan boxes has been increased to P150,000 from P10,000 in order to address the needs of OFWs.

Returning residents, or those who have stayed in a foreign country for at least six months, are granted tax and duty exemption on personal and household effects, provided it should not be in commercial quantities and not intended for sale or hire.       

The value is limited to P350,000 for those who have stayed in a foreign country for at least 10 years and have not availed themselves of the privilege within the period prior to their return; P250,000 for those who have stayed in a foreign country for at least five years but not more than 10 years and have not availed themselves of this privilege within five years, and P150,000 for less than five years and have not availed themselves of this privilege within six months prior to arrival.

Lina said the functions of the Entry Processing Unit, which reviews the import documents, and the agency’s Assessment Office could be merged.

He said he dreams of trimming down the process in the release of a shipment from seven to three steps. He proposed that the documents should be checked first by the examiner, who could also take on the function of appraiser before the cargo would be released.

He also proposed an audit of the shipment.

The proposed reorganization would affect 3,600 personnel of the BOC, but since he is planning to make the agency’s operations 24/7, those displaced during the daytime shift would be reassigned to nighttime duties.

There are also plans to review the current systems in the Post Entry Audit and the BOC’s computerization program.

To eliminate queueing, Lina is planning to tap Information Technology, improve the computerization process and practice paperless transaction.

Coloma said the CMTA allows the country to align customs management and tariff administration with the standards and practices of 140 other countries, which are signatories to the 1999 Kyoto Convention.

In June 1999, the World Customs Organization Council adopted the revised Kyoto Convention as the blueprint for modern and efficient Customs procedures in the 21st century.