BOC complain of some EOs that erode revenues
THE Bureau of Customs (BOC) wants executive orders (EOs) such as the one granting zero duty importation to oil products outside the Asean bloc be scrapped to avert a revenue leak of at least P1 billion a month.
BOC chief Angelito Alvarez said over the weekend said the agency is already talking with the Department of Trade and Industry (DTI) for the possible amendment or scrapping of a number of EOs that allowed duty-free imports of products into the country.
“The Finance department is already coordinating with the Trade department to review the so-called midnight executive orders. As far as Customs is concerned, the earlier [the tax-free privileges are revoked, the better. Ideally, we want the issue resolved over the next 45 days,” Alvarez said.
He said it is crucial for the government to review these directives for possible amendments as soon as may be possible since these duty-free importation privileges have negative impact on the tax collections.
In the case of oil imports, the foregone revenues in customs duties amounted to roughly P1 billion a month, or P12 billion per year.
Oil imports coming from within Asean are slapped zero duties under the country’s commitment to the Asean Free Trade Area.
But a so-called midnight EO, issued near the end of former President Arroyo’s term, also cut to zero the duties of oil imports coming from outside of Asean, which used to be slapped 3 percent Most Favored Nation (MFN) rates due to clamor of importers.
Alvarez said that apart from oil, the BOC is also lobbying that the duty exemptions for imported wheat, cement and hot rolled coils, or raw materials used in manufacturing steel, no longer be extended.
“The tax-free privileges for the importation of wheat, cement and steel raw materials are undermining our tax take by hundreds of millions of pesos per month,” said Alvarez.
He said it would take another EO from President Aquino to reverse or amend these revenue-eroding measures.
“When the collection target was set, there was no assumption of new EOs that would grant duty exemptions and it is very important that Customs, along with Internal Revenue, be able to meet our targets as the government struggles to control its deficit spending,” he said.
Customs, which accounts for nearly a third of the government’s tax revenues, is tasked to collect 280 billion this year.
So far, the agency has already incurred shortfalls in its monthly collection targets for the first two months of the Aquino administration. Dino Ng