The Department of Finance (DOF) has issued Department Order (DO) No. 44-2014 which sets post-entry guidelines under the Fiscal Intelligence Unit (FIU).
Under DO 44-2014 dated June 17 and signed by Finance Secretary Cesar Purisima, the DOF-FIU will identify importers and import entries to be subjected to post-entry audit through a computer-aided risk management system.
The audit criteria includes existing studies on import products with a high risk of being subjected to erroneous classification, misdeclaration and undervaluation; relative magnitude of customs revenue from certain imported products; rates of duties of the importer’s imports; and compliance track records of the importer.
Selected import entries will be analyzed to determine if valuation or compliance issues exist.
The DOF-FIU will inform the Bureau of Internal Revenue (BIR) of the selection of the importer. The BIR will in turn issue a letter of authority for its personnel to examine the importer’s records and books of accounts for any deficiency taxes.
The DOF-FIU will notify the importer by sending post-entry audit findings (PEAF) to the importer’s address. A PEAF states the import transactions covered, amount of deficiency duties, and basis of the findings.
Within 30 days from receipt of the PEAF, the importer may file one reply of agreement or disagreement with the PEAF.
The order also provides for a “Strictly No Contact Policy”, where the DOF-FIU is barred from holding a conference with the importer and/or broker or any of their representatives on the PEAF. Violators will be held administratively liable for their actions.
Executive Order No. 155-2013 issued by President Benigno Aquino on December 18, 2013 transferred the functions of the post-entry audit from the Bureau of Customs (BOC) to the FIU in order to maintain independence and impartiality of audit functions and to ensure efficiency and integrity in government service.
FIU is mandated to identify potential revenue sources and leakages by analyzing data from the BOC and other revenue-generating agencies attached to DOF and to monitor their revenue performance.
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