Customs seeks lower targets as it sees tax cuts

MANILA, Philippines - The Bureau of Customs (BOC) will seek approval to reduce its revenue targets this year since lower oil costs and duty-free imports may cut its collections. The agency, the government’s second-largest revenue source, is currently collating data which will indicate the effect of lower oil prices on its revenues, Customs Commissioner Napoleon L. Morales said. Lower oil prices translate into reduced taxes since the government collects a percentage off costs. Taxes from crude comprise 65 to 70 percent of its revenues. In July, crude reached $147 per barrel, the highest in history. Currently, oil is at $47 per barrel. “We are already preparing a letter today for the possible adjustment on the basis that the assumption used for oil imports in October is $75 per barrel but now it is already $32 to a barrel. Even if you double that figure, it will still not reach the assumption," Morales said. Earlier, the Development Budget Coordinating Committee (DBCC)—an inter-agency body that sets the country’s economic targets—set the BOC’s target at P317 billion. The Japan Philippine Economic Partnership Agreement (JPEPA) will likewise decrease its revenues since the trade accord will allow the duty-free entry of Japanese goods. Similarly, an executive order temporarily abolishing the duties on imported wheat and cement will also lower the agency’s collections, Morales said. “This is the reason why we need to know the revenue impact and foregone revenues of these factors so that the DBCC will have a basis for adjustment," Morales said. - GMANews.TV