PHILIPPINE importers will now have to be accredited by the Bureau if Internal Revenue (BIR) before they can import goods through the Bureau of Customs (BOC), after the government issued a regulation formally moving the BOC’s accrediting function to the BIR.
Another regulation that complements the transfer requires that foreign goods entering the country and dispatched by the BOC be subject to post-entry audit by the Fiscal Intelligence Unit (FIU) of the DOF. This regulation has effectively dissolved the Post-Entry Audit Group (PEAG) of the BOC.
The issuance of the two new regulations – Department Order Nos. 12-2014 and 13-2-14 – is part of BOC’s ongoing reform program to rid the agency of corrupt staff, smugglers and their abettors in the agency.
It may be recalled that under Executive Order 155 signed by President Benigno Aquino on December 18, 2013, the FIU was mandated to perform functions of the PEAG, including directing the development of a computer-aided risk management system using data warehousing technology and other statistical tools; establishing and recommending audit targets to the Commissioner of Customs; formulating an audit work plan for approved audit targets; conducting audit examination, inspection, verification or investigation; and developing and implementing a customs compliance program.
The Department of Finance (DOF)’s new orders will subject importers to stringent verification procedures before they can obtain the necessary BIR Importer Clearance Certificate.
The DOF, the parent agency of BIR and the BOC, said the accreditation requirement would help ensure that only legitimate and tax-paying businesses would be able to import goods through the Customs’ ports.
The twin measures are aimed at addressing huge foregone government revenues resulting largely from corruption in the BOC and weak auditing by some Customs personnel.
The transfer allows the BIR to use its extensive taxpayer database and information technology system to get more information on importers seeking accreditation.
“The BIR accreditation system is an essential step in our efforts for importer accountability and compliance,” Finance Secretary Cesar Purisima said. “With the database of the BIR on registered taxpayers, we will be in a better position to determine whether an importer is doing legitimate business and whether he is paying the right taxes.”
Purisima said that taking away the function of post-entry audit of imports from the BOC was a prudent move.
“The post-entry audit work the FIU will perform is critical to our campaign to run after smugglers and will institutionally provide a good check-and-balance mechanism for Customs,” Purisima said.
The finance chief noted that collections by the BOC out of its post-entry audit stood at only P700 million last year, leaving the BOC short of its P340-billion target.
Stakeholders said they would have to see first how the transfer of the accrediting function to BIR would affect operations.
Port Users Confederation immediate past president and now director Dominador de Guzman told PortCalls, “We don’t know yet how this will affect the industry, but it will be a different ball game now because they might require additional information that the concerned (parties) cannot provide immediately.”
Malou Ronquillo, president of the Association of SEIPI Logistics Managers, said if the BIR’s system is robust, then there should be no problem. However, the group will see first if there will be issues in accreditation.
Ronquillo also suggested that accreditation be done online similar to what is being done by the Philippine Economic Zone Authority.
Chamber of Customs Brokers, Inc. president Joseph Tabirara said the immediate effect of the transfer would be additional transport cost for brokers since they have to travel to the BIR offices instead of completing all processes at the Port of Manila.
However, if processing of accreditation by the BIR turns out to be faster, then the change would be worth it, Tabirara said.
CCBI executive vice-president Samson Gabisan said he agreed with the transfer as long as requirements would be simpler. ––With Roumina M. Pablo
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