spot_img
28 C
Philippines
Friday, March 29, 2024

BoC set to adopt cross-border electronic invoicing

- Advertisement -

The Bureau of Customs (BoC) will adopt the cross border electronic invoicing (e-invoicing) in its digital transformation program targeted to simplify and speed up trading and eliminate technical smuggling.

Customs Assistant Commissioner and concurrent spokesman Philip Maronilla said the bureau does not stop from improving its system, and cross border e-invoicing is something that caught the BoC’s interest.

Based on the recent experience of Indonesia, which lost $12 billion in duties and taxes on gold imports, it could have beenprevented by cross border e-invoicing which prevents the tampering of goods description and HS codes, a standardized numerical method of classifying traded products used by customs authorities around the world to identify products when assessing duties and taxes and for gathering statistics.

“Tampering of the HS Code is very rampant. It is done by unscrupulous importers in connivance with some corrupt customs personnel,”according to Rosendo, president of the Samahang Agrikultura ng Pilipinas (Sinag), adding that tampering of HS code is common in the importation of meat and steel products.

A 2021 report by the UN Comtrade Data on meat trade, covering HS Codes 0201 to 0210, showed that all  countries reported exports to the Philippines amounted to  US$ 2,265,193,202 but the  reported Philippines import from all countries was only showed US1,850,598,993 or a difference of  US$414,594,209, which is equivalent to around P20.730 billion.

- Advertisement -

The same report also showed a big disparity in 97 other different HS Codes wherein the  all countries reported export to the Philippines amounted to US$149,866,915,512 while the reported Philippine imports from all countries was only US$124,390,447,217 or a disparity ofUS$25,476,468,295. The disparity is attributed to the tampering of the HS codes.

Maronilla admitted that undervaluation and misdeclaration were the most common schemes used by unscrupulous importers and brokers to evade payment of correct customs duties, resulting in billions of pesos in tax losses that could have otherwise been used to fund vital government projects and provide assistance to the marginalized sectors of society.

“It is new to us but we are open to it. We can integrate it in our system,” Maronilla said. “Any innovations or upgrades in our system that would speed up trade and eliminate corruption is always a welcome development. We are ready for it.”

On a yearly basis, the BoC is losing billions of pesos  in foregone duties and taxes, due to undervaluation, misdeclaration, misclassification and underdeclaration as shown in a 20-page report of the Federation of Philippine Industries (FPI), headed by anti-smuggling advocate Jesus Arranza.

E-invoicing refers to the electronic authentication of tax invoices through an invoice registration portal. Each invoice is issued a unique invoice reference number which is later used for invoice matching and auto populating tax return and waybill forms. This concept is the same in almost all countries that have implemented e-invoicing.

The system is already being used by some countries in Asia that include Singapore, India, South Korea, Japan and Vietnam. In European Union member countries, e-invoicing on business to government transactions is mandatory. Recently, Finland, Italy and France, among other EU countries, have expanded the purview of e-invoicing to business-to-business transactions.

- Advertisement -

LATEST NEWS

Popular Articles