P142b lost to smuggling in six years
Fel V. Maragay
Manila Standard
The Senate committees on ways and means and on finance are looking into the loss of P142 billion in taxes and customs duties as a result of rampant smuggling from 2002 to 2007.
The tax loss was contained in a report submitted to the two committees by the Federation of Philippine Industries, led by its president Jesus Arranza, based on its comparative analysis of the volumes of goods imported into the Philippines as reflected in the records of the Bureau of Customs, International Monetary Fund and the National Statistics Office.
The data revealed that the government lost P1.2 billion in customs duties due to technical smuggling of ceramics products from China alone during the six-year period.
Based on IMF records, $284.7 billion worth of products were imported into the Philippines from 2002 to 2007 while NSO records put the amount at $274.3 billion. But Customs booked only $195 billion worth of imports for the period.
There was a disparity of $89.7 billion between the figures of the IMF and Customs and $79.2 billion between the figures of the NSO and Customs.
The data revealed an annual disparity of $14.95 billion between the IMF and BoC data and a disparity of $13.2 billion between the NSO and BoC records.
The average annual disparity of $14.95 billion in the amount of imports reported by the IMF and BoC was equivalent to P747.5 billion (based on an average exchange rate of P50 to the US dollar at that time).
Arranza said this means the government was deprived of P89.7 billion in 12 percent value-added tax and P52 billion in 7 percent customs duty or a total annual revenue loss of P142 billion as a result of smuggling, either outright smuggling or misdeclaration of imports in the past six years.
Arranza said the discrepancies in the value of imports appear to have been validated by the FPI’s study of the importation of ceramics from China.
He said the BoC figures showed that the Philippines imported 35.4 million square meters of ceramics from China in 2002 to 2007. But he said data from China’s Bureau of Customs revealed that China had sold 43.6 million sqm of ceramics to the Philippines. The discrepancy totaled 8.2 million sqm which caused an estimated revenue loss of P1.2 billion for the Philippine government.
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