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Customs sets probe on P50-B smuggling

In a statement, the BOC said motor vehicle, oil and cigarette smuggling post the highest tax leakages, accounting for almost 11 percent of the agency’s 2017 collection target of P467.9 billion. File photo

MANILA, Philippines -  The Bureau of Customs (BOC) is set to probe deeper into reports of rampant vehicle, oil and cigarette smuggling in the country, which has resulted in more than P50 billion in lost revenues for the government.

In a statement, the BOC said motor vehicle, oil and cigarette smuggling post the highest tax leakages, accounting for almost 11 percent of the agency’s 2017 collection target of P467.9 billion.

Citing its records, Customs said the government loses P22.5 billion in revenues from oil smuggling and P16 billion from contraband cigarettes.

Another P21 billion are lost from vehicle smuggling, according to data from Global Financial Integrity and the International Monetary Fund.

Customs commissioner Nicanor Faeldon has directed its intelligence and investigation service to look further into these illegal activities.

The BOC has so far collected a list of companies which are suspected to be engaged in the smuggling of the three products.

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“We are ready to use all available options in the probe against erring companies of oil, motor vehicle, and cigarette to make sure we control all forms of revenue leaks that are seriously detrimental to hitting revenue targets including proper trade facilitation processes of BOC,” Faeldon said.

“It will never be an easy task for us, but we will toil hard through sweat and blood, only to make sure that we do our jobs in our faithful compliance to our mandated tasks as public servants,” he added.

Faeldon also committed to address the fraudulent misrepresentation and misdeclaration of goods in the BOC.

This investigation is part of the bureau’s initiatives to improve revenue collections, and is in line with the policies of President Duterte.

According to the BOC’s legal service department, several oil, vehicle and cigarette companies owe the government billions in unpaid taxes. The department said these cases are currently subject to court litigations, and will hopefully face administrative penalties soon.

Oil smuggling commonly occurs through pilferage (siphoning off of oil from tankers to barges in high seas and then to oil trucks on land delivery to depots), while vehicle smuggling are carried out through misdeclaration, misclassification, or undervaluation.

Cigarette smuggling also happens from non-payment of duties and taxes, aside from the use of fake tax stamps.

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