The Customs Modernization and Tariff Act (CMTA) will modernize the Bureau of Customs (BOC), align the agency’s operations to global best practices, and increase its revenue collection by 10%, according to Senator Juan Edgardo Angara.
In a sponsorship speech delivered on September 28, the Senate Ways and Means Committee chairman urged the passage of Senate Bill No. 2968, or An Act to Prescribe the Customs Modernization and Tariff Act, to “simplify, modernize and align our customs procedures with global best practices by updating the Tariff and Customs Code of the Philippines (TCCP).”
Angara noted the proposed measure had been under debate for almost a decade now and that “it is time to pass the CMTA.”
He said several amendments to the TCCP after the Philippines became a signatory to the World Trade Organization in 1995 were just patched-up changes and that outdated provisions were kept intact. No updates to the TCCP had also been made since the country signed the Revised Kyoto Convention, he said.
Angara continued that with outdated rules, problems will surely arise, such as the issue with the balikbayan (personal effects) boxes where the exempt duty remains at P10,000 as mandated in 1987.
Angara said the CMTA “simplifies customs procedures such as import clearances, making the release of goods much faster regardless of whether you are an individual entrepreneur or a large multinational.” For instance, highly compliant or low-risk importers could enjoy the benefit of deferred payment of duties and taxes. The customs bureau’s functions toward “simplified, secured, and harmonized trade facilitation” will be reinforced.
Moreover, the bill will provide a clearer basis for valuations and processes for free, regulated, prohibited and restricted importations, as well as clearer rules on transit and transhipments. Angara said emphasis will be placed on the use of information technology “to speed up customs operations and to make them more transparent.”
Aside from operational changes, the lawmaker said CMTA aims to “ingrain transparency and accountability into the BOC.”
Under the act, district collectors and frontline employees “will be prevented from holding the same position in the same district for more than three years.” Higher penalties and punishments will be prescribed to further deter smuggling, even as the CMTA “clearly defines the exercise of customs police authority, customs jurisdiction, and customs control.”
The tax exempt value for a balikbayan box will be increased to P150,000 from P10,000 and the de minimis value to P10,000 from P10. There’s a provision, too, that will allow for changes to these figures every three years. The proposed measure also aims to make importation of relief goods during calamities duty- and tax- free.
Citing BOC officials’ earlier statements, Angara said the CMTA will produce a 10% improvement in collections.
With the act’s passage, trade facilitation will be faster and cost of doing business cheaper. This will encourage more businesses to enter the country, and help the country compete better in the coming era of regional integration. Angara noted the tainted image of BOC will improve.
There have been previous reports that the Senate is pushing for passage of the bill on second and last reading within the week. Its counterpart bill in the Lower House was approved on second reading on Sept 23. – Roumina Pablo
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