Palace signs customs modernization act into law

June 1, 2016 at 10:16

A MEASURE seeking to upgrade the Bureau of Customs’ (BoC) ability to fast-track import processing and install safeguards against smuggling has been signed into law by President Benigno S. C. Aquino III.

The reform forms part of a “wish list” of policy reforms submitted by Malacañang and business groups to the 16th Congress.

Among the planned upgrades for the BoC include the full electronic processing of all documents, forms, and receipts, alongside streamlining methods for the examination and valuation of imports and exports.

“In accordance with international standards, the Bureau shall utilize information and communications technology to enhance customs control and to support a cost-effective and efficient customs operations geared towards a paperless customs environment,” read the final draft submitted by the bicameral committee of the House of Representatives and Senate to Malacañang.

The new law would also facilitate a shift in the bureau’s focus to trade facilitation rather than on revenue collection, in accordance with the Philippine commitment under the Revised Kyoto Convention to improve the ease of international trade, legislators earlier pointed out.

In a statement, Customs Commissioner Alberto D. Lina said the measure would cement the reforms put in place in the bureau, while noting that transition to computerized processing systems is already underway.

“Efforts are already underway to attune current BoC systems to the new provisions in the CMTA focused on business process re-engineering, computer-based systems development, organizational development, capacity building, and external communication and education,” Mr. Lina was quoted as saying.

“Emphasizing the ease of trade through streamlined processes, the CMTA will establish the requisite foundation for a cashless, faceless and paperless environment in Customs, reducing corruption and technical smuggling that will result in enhanced revenues.”

In July 2015, Mr. Aquino also signed into law amendments to the Cabotage law through RA 10668, which is expected to trim shipping costs to the Philippines by allowing foreign ships to load and unload export cargo at local ports.

The CMTA has been left pending for some eight years, Mr. Lina earlier said, and only got its much-needed push from the uproar on the forced opening of balikbayan boxes sent home by overseas Filipino workers (OFWs) in August 2015.

In a statement, Sen. Juan Edgardo M. Angara said the new law increases the duty-free value for items sent home by OFWs to P150,000 from the previous P10,000, provided that these are not meant for sale or trade. Returning Filipinos will also be exempt from paying taxes on their personal items brought back home worth P350,000 or less.

“With the increase in the values, we lessen the discretion of the Customs officials to inspect goods and collect taxes, thus minimizing cases of corruption and smuggling,” said Mr. Angara, who chairs the Senate Committee on Ways and Means.

“Simplified” Customs procedures for disposition, forfeiture and seizure of counterfeit goods, and steeper penalties for illegal shipping practices are also put in place under the law. It also seeks to adjust the de minimis or threshold value on duty-free imports to P10,000 from the outdated P10 ceiling, to be hiked every three years by the Finance secretary.

The new law also assigns ports and divides the country into Customs districts, along with duly-designated warehouses to store goods which are subject to inspection of district collectors.

RA 10863 also identified 17 principal ports of entry around the country: Aparri, San Fernando, Manila, the Manila International Container Port, Ninoy Aquino International Airport, Subic, Clark, Batangas, Legaspi, Iloilo, Cebu, Tacloban, Surigao, Cagayan de Oro, Zamboanga, Davao, and Limay.

Other ports can be created following the new law.

Customs officials, agents, and inspectors, as well as BoC-authorized military personnel and officials from the Bureau of Internal Revenue may examine and seize any goods and vessels to check compliance with declaration requirements and duty payments. Those unable to prove settling the right taxes may be subject to forfeiture proceedings.

The Bill also provides for steeper penalties for misdeclaration of goods to 250% of the total taxes due.

Those found engaging in unlawful import or export of goods will also be fined between P25,000 and P250,000, as well as jail time of 30 days to reclusion perpetua — or as much as 30 years.

Interest of 20% per annum is also imposed for unpaid duties, taxes, and other charges.

As the parent agency of the BoC, the Department of Finance will have to draft the implementing rules of the new law.