Senator Sonny Angara on Monday urged his colleagues to pass the Customs Modernization and Tariff Act (CMTA) which seeks to simplify, modernize and align the country’s customs procedures with global best practices.
The 157-page proposed measure, which has languished in Congress for almost a decade, aims to amend and update the Tariff and Customs Code of the Philippines in compliance with the Revised Kyoto Convention, a blueprint for modern and efficient customs procedures of the World Customs Organization to which the Philippines is a signatory since 2010.
“It will speed up and strengthen transparency of our Customs processes. And it would further encourage the world to trade with us. Customs modernization will enhance the country’s global competitiveness,” said Angara, chairman of the ways and means committee, in his sponsorship speech in Filipino.
The senator cited a 2014 study by Global Financial Integrity, a non-profit, research and advocacy organization based in Washington, D.C., which shows that from 1960 to 2011, the government lost approximately $277 billion in revenues—about P13 trillion at today’s exchange rates—due to technical smuggling.
“We want to overhaul and modernize the bureau which has long been perceived as one of the most corrupt and underperforming government agencies in the country. The measure also reinforces BOC functions towards simplified, secure and harmonized trade facilitation apart from being a revenue-generating agency,” Angara said.
The CMTA, which has gained support from the Joint Foreign Chambers, simplifies and clarifies Customs procedures including import clearances and valuations, making the release of goods much faster regardless of whether you are an individual entrepreneur or a large multinational.
The bill mandates the use of information and communications technology and other appropriate applications that speed up the inner workings of Customs, but also make it more transparent.
“We aim to ingrain transparency and accountability in the BOC. For instance, District Officers and front-liner employees will be prevented from holding the same position in the same district for more than three years. Higher penalties and punishments will also be prescribed as a further deterrent to smuggling,” the lawmaker explained.
Revenue boost seen
The measure also clearly defines the exercise of customs police authority, customs jurisdiction and customs control by specifying the functions of the BOC when it come to post entry audits and clarify the bureau’s relations with the country’s free zones.
According to BOC officials, once the Customs modernization bill is enacted, its revenue collection will improve by 10 percent.
Angara said that in 2014, the BOC collected P369 billion in revenues, but estimated improvements should add P36 billion to P37 billion more to national coffers once the law is in place.
The CMTA further seeks to raise the tax-exempt value of balikbayan boxes from P10,000 to P150,000 and the de minimis value, which is the minimum cost of goods required to undergo Customs inspection, from P10 to P10,000, and to adjust the values for inflation every three years.
“The amount that should be exempted from taxes for our returning residents or overseas Filipino workers is no longer equitable. Because this amount has not been changed, the policy is no longer followed and as a result it opened a way for opportunists to take advantage,” Angara said.
“While modernizing Customs is not easy, it is only right to tread this path. This bill has been debated for 10 years and each hour that passes, an antiquated and allegedly corrupt system prevails. It is time to correct this. Let us pass the CMTA,” he added.