BOC orders audit of imports with preferential tariff

The Bureau of Customs has ordered Tuesday an audit of import shipments last year that were erroneously given preferential tariff. "Tens of thousands of import shipments" last year were not qualified for preferential tariff and could yield about P600 million in missed collections, according to Customers Commissioner Angelito Alvarez. The audit, Alvarez said, would initially focus on shipments that came in from China, Korea, and Vietnam. Certain products can be granted preferential tariff under the ASEAN-China Free Trade Agreement, the ASEAN-Korean Free Trade Agreement and the ASEAN Trade in Goods Agreement. Alvarez said initial investigation showed that commodities from China that were wrongly classified as qualified for preferential treatment included corn, flour, sweet corn, powder and cotton fiber. One company alone saved more than P9 million from duties and taxes for one shipment, he disclosed. As such, Alvarez said he has already ordered Customs examiners and appraisers to be guided accordingly by the country’s trade agreements. The BOC, the government’s second largest revenue earner, has a collection target of P320 billion this year. Because of this, it is stepping up efforts to raise more revenues by improving tax administration and plugging leaks primarily incurred from rampant smuggling. Higher collection revenues mean lower budget deficit for the government. The Aquino administration hopes to contain the budget deficit at roughly P300 billion this year, or 3.2 percent of gross domestic product (GDP). Last year, the budget gap amounted to P314.4 billion or 3.7 percent of GDP. — JMT/VS, GMA News