Customs modernization to improve trade facilitation, increase revenue collection

The Senate approved on third and final reading the proposed Customs Modernization and Tariff Act (CMTA) which aims to simplify, modernize and align the country’s customs procedures with global best practices by amending the Tariff and Customs Code of the Philippines (TCCP).

“We want to overhaul and modernize the bureau which has long been perceived as one of the most corrupt and underperforming government agencies in the country. Approximately $277 billion in revenues was lost by the government from 1960 to 2011 due to technical smuggling according to a 2014 study of Global Financial Integrity,” Senator Juan Edgardo ‘Sonny’ Angara said.

Mr. Angara, chairman of the Senate Committee on Ways and Means and sponsor of Senate Bill No. 2968 or the proposed Customs Modernization and Tariff Act (CMTA), said the measure aims to amend the TCCP in compliance with the Revised Kyoto Convention (RKC) which is a blueprint for “modern and efficient customs procedures” of the World Customs Organization.

Senate President Franklin Drilon said that upgrading the current Bureau of Customs (BOC) systems to electronic processing, would make the BOC’s importation and exportation procedures faster, more effective and more convenient, especially for the public.

‘The modernization under the CTMA will benefit millions of ordinary Filipinos who suffer from the inefficiencies in the handling of incoming and outgoing goods, especially during holiday seasons when Filipinos endure the cumbersome process of trying to claim gifts or packages which are stuck at the ports," he stressed.

The bill proposes the use of information and communications technology and other appropriate applications to reinforce the BOC’s functions towards simplified, secured and harmonized trade facilitation.

Mr. Angara said the passage of the bill into law would increase transparency and simplify procedures in the BOC, increase the de minimis value, raise the tax exemption ceiling for packages sent by balikbayans and returning residents, and provide harsher penalties for smuggling. De minimis are small items that are usually minor or lacking importance.

The bill proposes an increase in the tax-exempt value of balikbayan boxes from P10,000 to P150,000 and the de minimis value from P10 to P10,000. Tax-exempt and de minimis values may also change every three years. Donation and relief goods will also be duty- and tax-free during times of calamity.

Mr. Angara said the bill aims to ingrain transparency and accountability into the BOC, as apart from drastically reducing human intervention due to the electronification of customs procedures, higher penalties and punishments will be prescribed as a further deterrent to smuggling.

“Our measure clearly defines the exercise of customs police authority, customs jurisdiction and customs control,” Mr. Angara said.

BOC officials said they anticipate a 10 percent increase in revenue collection once the bill is enacted into law. The BOC pegged revenue collection at P369 billion in 2014. (Apple Buenaventura)