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The Bureau of Customs collected P247 million in the first two months of the year as a result of its post-clearance audits and Prior Disclosure Program (PDP)
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The additional revenues were collected from six outstanding final demand letters issued by the Post-Clearance Audit Group and 48 PDP applications filed by importers from January to February 2021
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Audit notification letters (ANL) were also issued to six approved PDP applications and seven final audit reports were completed, resulting in six new demand letters amounting to P41 million issued and one clean report finding
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28 ANLs were issued from January to February 2021, 17 of which were issued to coffee importers, 10 to oil and petroleum importers, and one to a consignee with compliance issues
The Bureau of Customs (BOC) collected P247.369 million in the first two months of the year from the conduct of its post-clearance audit and Prior Disclosure Program (PDP).
The additional revenues were collected from six outstanding final demand letters issued by the Post-Clearance Audit Group (PCAG) and from 48 PDP applications filed by importers from January to February 2021, BOC said in a statement. Demand letters are served to importers for payment of deficiencies in duties and taxes on previous shipments.
According to PCAG, of the total PDP applications filed, 31 were from mechanically deboned meat (MDM) importers under audit, for a total amount of P67.597 million, while 13 PDP applications were from rice importers under audit amounting to P6.741 million.
PDP, formerly called Voluntary Disclosure Program, is based on international best customs practice that allows importers to voluntary pay for discrepancies in duties and taxes of previous shipments before post-clearance audit.
PCAG last January also issued audit notification letters (ANL) to six approved PDP applications and completed seven final audit reports. BOC said these resulted in the six new demand letters amounting to P41.174 million issued and one clean report finding. A clean finding meant no deficiency was found in duties, taxes, and other charges and the importer had complied with its obligation to keep records.
The demand letters will become final and demandable 15 days after they were received by the importers.
An ANL informs a company that it will be subjected to post-clearance audit and details the audit procedure.
Meanwhile, 28 ANLs were issued from January to February 2021, 17 of which were to importers in the coffee industry and 10 to those in the oil and petroleum industry. One was sent to a consignee with compliance issues based on PCAG profiling.
PCAG is optimistic about collecting additional revenues from post-clearance audits for the remaining months of 2021.
At present, 11 outstanding final demand letters amounting to P6.9 billion remain unpaid and will be referred to BOC’s Legal Service for the filing of the necessary collection suit.
In 2020, PCAG generated an estimated additional revenue of P1.2 billion from its regular audits and PDPs. The group has also issued 168 ANLs, of which 60 were issued in October 2020 against importers of MDM.
The government has for years been imposing lower import duty on MDM of chicken and turkey in order to control inflation. An executive order was recently issued extending the lower tariff until 2022.
The post-clearance audit, formerly called post-entry audit, was returned to BOC in 2016 by the Department of Finance, where the function had been transferred in 2014.
In 2018 PCAG started welcoming applications to PDP and in early 2019, began sending out ANLs with the release of Customs Administrative Order No. 01-2019, which implements BOC’s post-clearance audit function.
Under the order, within three years from the date of final payment of duties and taxes or from customs clearance, BOC may audit, inspect, verify, and investigate records pertaining to any goods declaration. The declaration includes statements, declarations, documents, and electronically generated or machine-readable data.
Such audit intends to ascertain if the goods valuation is correct and determine if the importer is liable for duties, taxes, and other charges, including any fine or penalty.
