'Hot' potato: Importer faces P380-M rap

MANILA, Philippines - The Bureau of Customs (BOC) filed a multimillion-peso suit yesterday against a major importer of sliced potatoes, which supplies these products to groceries and giant fast-food chains operating in the country.

BOC Commissioner Angelito Alvarez filed before the Department of Justice (DOJ) a P380-million technical smuggling suit against Makati-based Kool 8 Enterprises for “undervaluation of imports by as much as 62 percent.”

The shipments of 10.2 million kilos were declared by the importer to have a dutiable value of only $0.47, equivalent to little more than P20 a kilo.

Kool 8 proprietor Ramon Pinero and Customs broker Ricardo Ebuna were charged with gross undervaluation, falsification and use of falsified documents.

Records of the case showed that in a span of 17 months starting in October 2009, Kool 8 imported the potatoes from the United States.

Divided into in 112 import entries which were unloaded at the Manila International Container Port (MICP), Kool 8’s shipments were assessed a value-added tax (VAT) of P25.9 million since the company falsely declared a total dutiable value of only P216.6 million.

However, Alvarez said investigations conducted by the BOC’s Run After The Smugglers (RATS) Group revealed that other importers declared a per kilo value of $0.91, about P40.40, for the same sliced potatoes bought from the same source within the same period of importation.

Alvarez said the company should have paid VAT totaling P45.6 million.

Customs Deputy Commissoner Gregorio Chavez, concurrently the executive director of the RATS Group, accused Kool 8 of submitting falsified and spurious invoices to evade paying the proper taxes.

Alvarez said in trying to save P19.7 million in VAT, Kool 8 would now likely lose the equivalent of more than P380 million they spent on their sliced potato importations.

The BOC is also set to file as soon as possible an amended charge sheet that would include the names of BOC employees who aided and abetted the fraudulent importations of Kool 8.