He needs an iron will and a firm resolve to combat smuggling at all points of entry. His precedessors have failed because smuggling is well-engrained in the system. And one thing is for sure, the technical smugglers in particular continue to go about their usual business because somebody inside the bureau is facilitating matters for them.
Smuggling is not only inherently wrong, it also punishes each and every one of us because it deprives government of badly needed revenues which it could have used for public service and infrastructure.
Alvarez has already barred haoshiaos at custom inspection areas, which is believed as a necessary first step in the effort to make all transactions open and aboveboard. But a lot more needs to be done. If the system needs to be overhauled, then so be it. If heads have to roll, then do it. Six years may not be enough for the new Customs chief to accomplish so much, if we are talking about reorienting, reeducating, changing a culture of distrust with anything that has to do with the Customs bureau. But someone has to start the ball rolling.
From what I’ve learned from people complaining about the effects of smuggling, there are two kinds of smuggling: the actual backdoor smuggling and technical smuggling. Backdoor smuggling takes place when goods are brought into the country via big vessels that in turn load the smuggled goods into smaller boats which manage to enter our territory. But the volume of goods smuggled through this process is not as significant compared with those brought in via technical smuggling. After all, how much can the small boats accommodate? Unless the men in these boats carry high-powered firearms, they should be no match to our patrol boats.
Technical smuggling on the other hand can take different forms. It can be through misdeclaration and undervaluation. Misdeclaration happens when goods are declared as another kind of goods which under our tariff schedule has lower import duties. Undervaluation is another form of technical smuggling whereby the actual volume or value (or both) of goods brought in is not reported so that a smaller amount of duties and taxes is levied. But in both cases, the importations are legitimate and brought in through the major ports of entry, complete with papers and stuff.
Take the case of the reported technical smuggling of Turkish flour into the country. According to reports reaching the Customs bureau, already, at least P51 million in import duties and value-added taxes has been lost by government in the first five months of 2010 alone.
The P51-million estimate pertains only to the operation of eight companies. A bigger amount may be involved if the operations of other smugglers are factored in.
According to the report, two of the eight companies used the Manila International Container Port (MICP) as point of entry while a third used both the MICP and the Port of Manila.
The first cheated government of at least P13.8 million by importing 8,592 metric tons but declaring only 5,389; while the second imported 7,086 metric tons while declaring only 4,961, evading the payment of P6.9 million.
Meanwhile, the third importer brought in 10,488 tons but undervalued it by 23.3 percent to save P6.9 million in duties and taxes.
They say the imported Turkish flour had been undervalued for as low as $24.77 per ton when the reference value of Turkish flour at Customs is at $300 per ton.
The big question is, how are they able to get away with this?
This is one question for which Alvarez will have to find the answer himself. He needs to identify the loopholes in the system, the men and women at customs who are given discretion to determine the volume and value of goods brought in, those who are equally given the discretion to impose the amounts payable, among others. Does the customs bureau have the capacity to identify if the goods are properly declared? I remember before when powdered juice is being used as a means to smuggle into the country sugar. Powdered juice has a lower import duty compared with sugar, but it contains as much as 90 percent sugar. There’s something definitely wrong with the system if this is the case.
If I’m not mistaken, the same thing happened with animal feedwheat and breadwheat. The difference between the two is the former is of lower quality. But there has been reports before that what was being declared as feedwheat, and therefore carried with it lower duties, is being used as wheat for food. Isn’t there an internally accepted method to determine which is which?
This huge room for discretion has been used by some unscrupulous people at the customs to fatten their pockets.
But the case of Turkish flour smuggling is not as complicated. Does the system rely on what is being declared? There must be a way of checking the volumes and value declared against the actual. There is no excuse for this practice being allowed to cheat the government of its lifeblood.
President Aquino and commissioner Alvarez should not allow smugglers to continue mocking government. Inarguably the most corrupt agency in the entire bureaucracy, the customs bureau should be used as a showcase of the new government’s resolve to end corruption in the public sector.
-Mary Ann Ll. Reyes
Source: http://www.philstar.com/Article.aspx?articleId=596333&publicationSubCategoryId=66
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