Luxury car dealers face smuggling, P68-M tax evasion raps

(Updated 2:02 p.m.) The Bureau of Customs filed before the Department of Justice on Thursday complaints of smuggling and a P68-million tax evasion against the officers of a luxury car dealership. Customs Commissioner Angelito Alvarez said the car dealer Viking Haulers, Inc. allegedly brought in 10 luxury vehicles from January to May this year and paid only P17.4 million in taxes and duties, or P68-million lower than the correct amount of taxes and duties. The alleged undervalued cars include three Lamborghinis, three Porsches, three Mercedes Benzes, and a Masserati Quadroporte. Alvarez noted that the most glaring discrepancy was the entry of a P17.4-million 2010 Lamborghini Murcielago, which carried a P25.2-million customs duty. However, the dealer only allegedly paid some P3.3 million. At a news briefing at the DOJ office in Manila, Alvarez named the Viking Haulers, Inc. officers as Reynaldo Pazcoguin, Rodelito Biag, and Ofelia Pazcoguin as the respondents. Customs broker Benjamin Valic was also charged for allegedly conniving with the dealers. The Customs chief said the accused declared their shipments as "motor vehicles" to evade additional tariff classification and valuation for luxury cars. "The accused were able to get away with this practice of providing general or generic description becauseof the cooperation and assistance of their contacts inside Customs who will soon be identified and included in the list of respondents," said Alvarez. Network of fraud? During the same briefing, Finance Sec. Cesar Purisima said he instructed Bureau of Internal Revenue Commissioner Kim Hacinto-Henares to check the income tax returns of the smuggling suspects. Purisima added he also requested the Department of Transportation and Communication (DOTC) and the Land Transportation Office (LTO) to check whether the allegedly undervalued cars have been sold, and if so, who the owners are. "We're trying to connect the dots and create a map so we can have a successful fight, not only against smuggling, but also against tax evasion," said Purisima. "This is a net we're weaving," he added. Purisima likewise said the BOC will also look into reports of smuggling in the oil and steel industries. However, he did not disclose further details. Smuggling hurts auto industry Meanwhile, Elizabeth Lee, President of the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) said they hope the administration of President Benigno "Noynoy" Aquino III can significantly curb smuggling, which affects the growth of the industry. The Philippine auto industry is currently growing at a rate of 37 percent but "without smuggling, the growth could have been stronger; the increase in sales higher, and job creation, greater," Lee said at the opening of the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) 3rd Philippine International Motor Show in Pasay City. "A stop to smuggling is a green light to a bigger domestic auto market which in turn is a go for immediate job creation," she said. "We are thankful that part of the President’s top priority includes job creation and a firm stand against all forms of corruption, including smuggling." Aquino, who was present during the event, said the actions of his government--including the filing of the case against Viking Haulers, Inc.--shows his administration's dedication to curbing smuggling. In his speech, Aquino said he will also promote the export of Philippine-made vehicles and vehicle parts to boost the local auto industry. "Your government will support efforts to enhance your Motor Vehicle Development Program, that will promote exports of both motor vehicles and parts and components; support parts manufacturing and auto-supporting industry development through an industry development fund; and establish standards and technical regulations," he said. — with Jam Sisante/VVP/RSJ, GMANews.TV