THE Bureau of Customs (BOC) collected P191.38 million in additional duties and taxes in January following its post-clearance audit verification and investigation of importers.
The amount, which is already included in its P47.14-billion total collection last month, resulted from the BOC’s issuance of three demand letters and the importers’ filing of 21 applications for Prior Disclosure Program (PDP).
Under Customs Administrative Order No. 01-2019, PDP refers to the program authorizing the Customs Commissioner to accept, as a potential mitigating factor, prior disclosure by importers of errors and omissions in goods declaration that result in deficiency in duties and taxes on past importations. This may also include disclosures on royalties and other proceeds of any subsequent, resale, disposal or use of the imported goods that accrues directly or indirectly to the seller.
Out of the 21 PDPs filed in January 2021, 17 were from Mechanically Deboned Meat (MDM) importers who paid a total amount of P36.59 million, BOC said in a statement on Wednesday.
In a separate interview with BusinessMirror, BOC Assistant Commissioner and Spokesman Vincent Philip Maronilla, who heads the bureau’s Post-Clearance Audit Group (PCAG), said the filing of PDPs by MDM importers stemmed from the 2019 incident when their shipments were assessed at a lower tariff of 5 percent instead of 40 percent.
Chicken MDM is a key component for processed meat products, such as hot dogs and canned luncheon meat.
The BOC back then said the retroactive application of tariff difference is legal, citing Executive Order (EO) 23 issued by the President in 2017, which stipulated that concessionary rates on certain agricultural products should go back to the 2012 levels once the quantitative restriction (QR) on rice is removed following the effectivity of the Rice Trade Liberalization Law.
No violation
While Maronilla said MDM importers filed the PDPs and paid for the discrepancy in tariff differential, he clarified that these MDM importers did not commit any violation.
“There was none. There was just an error in implementation because our system does not update right away [to reflect 40-percent tariff on MDM],” he said in a phone interview.
However, he said there are still MDM importers in 2019 that have yet to file PDPs.
Including the tariff differential that has yet to be paid by MDM importers in 2019, Maronilla said they are estimating to collect “a little under P100 million.”
Meanwhile, Maronilla also said seven rice importers were suspended last month for non-compliance, mostly for failing to comply with the submission of documents as part of the BOC’s ongoing post-clearance audit of rice imports that came into the country from January to June 2020.
According to Maronilla, the suspension meant that the rice importers would not be allowed to lodge their importations with BOC.
In the same statement, the bureau said PCAG also reported that six PDP applications were approved while five Final Audit Reports were completed in January, resulting in the issuance of two new demand letters amounting to P14.7 million.
Moreover, it said 28 new audit notification letters (ANLs) were issued, of which 17 are importers in the coffee industry, 10 in the oil and petroleum industry, and one consignee issued with ANL due to compliance issues based on the profiling conducted.
Although it is still too early to state the specific violations committed by the coffee importers, Maronilla told BusinessMirror that BOC together with the Department of Agriculture is looking into some “unqualified” exemption of these coffee imports to the imposition of safeguard duties.
He also refused to disclose the specific amount involved as they have yet to look into the importers’ compliance, but said the amount is quite huge.
Asked when they aim to finish the audit on 2018 to 2020 coffee imports, Maronilla said, “hopefully before the end of the year.”
As for the new ANLs issued to the oil and petroleum industry, Maronilla said this included companies that they have yet to audit before.
Moving forward, PCAG is optimistic additional revenues would be collected from post-clearance for the rest of the year.
At present, there are still 24 demand letters being collected with an estimated amount of P12 billion; 18 of which are undergoing motion for reinvestigation or reconsideration (amounting to P5 billion) and 8 of which remain unpaid and for referral to BOC Legal Service so a collection suit of P6.9 billion can be filed.
For this year, the BOC targets to collect a total of P616.7 billion, significantly higher by 21.84 percent than the downgraded 2020 target set for BOC at P506.15 billion.
Last year, the bureau’s total revenue collection reached P539.7 billion, above its revised revenue collection target by 6.6 percent or P33.5 billion.
