The Bureau of Customs will investigate top companies engaged in oil and motor vehicles importation and cigarette manufacturers that could be involved in smuggling, which has caused the government to lose more than P50 billion in revenues a year.
Customs Commissioner Nicanor Faeldon ordered the bureau’s intelligence division to probe importers of the top three products, after receiving reports that oil, luxury cars, and cigarettes were among the preferred goods being smuggled into the country.
Faeldon said oil smuggling is common through pilferage, siphoning off oil from tankers to barges in high seas, and then to oil trucks on land delivery to depots.
“Smuggling of luxury vehicles are carried out through misdeclaration, misclassification, and or undervaluation, while cigarette smugglers use fake tax stamps of the Bureau of Internal Revenue,” he said.
These products are currently the top sources of BIR’s revenue leaks, feared to hit more than P50 billion per year, or 10.68 percent of the annual revenue target of P467.9 billion, Faeldon said.
According to reports of the American think tank Global Financial Integrity and the International Monetary Fund, in oil smuggling alone, the government loses an estimated P22.5 billion annually.
The Philippines loses P16 billion a year from illegal cigarette sales, and an estimated revenue leak of P21 billion in vehicle smuggling, the GFI and IMF added.
“The rampant smuggling of luxury cars into the country is attributed to Filipinos’ new trend and flair for modish and majestic cars, believed to be inspired by the modernity of times,” Faeldon said.
The revenue losses from these three big-ticket import items contributes to $3.85 billion (P165.5 billion) in revenue losses from smuggling yearly, or 35.4 percent of the current annual revenue target, according to BOC records.
Faeldon said “mis-invoicing” of imported goods, or fraudulent misrepresentation (or misdeclaration), whether underdeclaration or overdeclaration, of the real value of goods as the prevalent malpractice “BoC intensely wishes to address” within his term.
“So far, the BoC has a top list of companies that are suspected to engage in oil, motor vehicles and cigarette smuggling to defraud the government,” he said.
The BoC’s legal service cited several big companies that owe the government billions of pesos in unpaid taxes and are currently the subject of court litigations.
“We are ready to use all available options in the probe against erring companies to make sure we control all forms of revenue leaks that are detrimental to meeting revenue targets, including proper trade facilitation processes of BoC,” Faeldon said.
