Smuggling should be taken seriously

DEMAND AND SUPPLY By Boo Chanco The Philippine Star

According to Senator Mar Roxas, "if you add up and collect all the government revenues lost to smuggling, there is no need to impose new taxes." In fact, Roxas said, "we may even have tax cuts if collection of taxes and duties are done properly."

Yun naman pala. So, how come Ate Glue has not given smuggling as much attention as the EVAT as a strategy for bridging the fiscal gap? On the contrary, I hear that the current acting Customs Commissioner may be changed because the traditional smugglers have become unhappy.

During an MOPC Forum that introduced the new economic managers of Ate Glue, I was elated to hear from the hi-tech savvy acting Customs Commissioner that he has a broad idea of how to reform the graft ridden bureau. And unlike the usual trapo protégés who were running the bureau in the past, Balong Arevalo sounded sincere when he discussed how he plans to use high technology to raise Customs revenues and clean up the bureau.

Of course I had no doubt such a gargantuan job would take time. That’s why I was surprised to hear that Arevalo was about to be changed and there is a long line of people who are seeking Jose Pidal’s blessings for the job. It shouldn’t be long before we hear the usual suspects singing "happy days are here again."

A former military officer who has demonstrated his capability in the past, there is no doubt that given the proper support, Arevalo should be able to do the impossible at Customs. He was earlier talking of streamlining and computerizing processes to reduce occasions for temptations at Customs. He is a pretty hard worker too. When I arrived at midnight the other week from China, he was there supervising Customs at NAIA.

According to Mar Roxas, he found out from several hearings that in technical smuggling alone, about P175 billion in revenues is lost every year. "This amount is double the P80 billion expected revenues from VAT," Senator Roxas observed." Technical smuggling is the non-payment of correct duties and taxes. It may be done by undervaluation, misdeclaration and misclassification.

"The bloated fiscal deficit is partly due to smuggling and its close cousins graft and corruption," Roxas added. "Undeclared commodities, which enter the country without proper payment of duties, have caused the economy to recoil. Corruption lies at the very center of smuggling activities." Although it is a long-standing national problem, Roxas believes that smuggling can be stopped by establishing a system that would promote transparency, accountability and efficiency as a preemptive strike against smugglers.

That’s precisely what Arevalo said he would do with the use of high technology. Arrangements, the Customs chief said, would be made with other port officials abroad so that our Customs group can know in advance what goods have been shipped to our ports. Procedures would also be set in place so that release of shipments cannot be delayed for no good reason.

Perhaps Mr. Arevalo should take time to brief Senator Roxas on what he has done, what he plans to do and what is making his plans difficult to implement. Between him and the senator, maybe they can work on improving present laws. Perhaps the penalties that are being imposed on smugglers are not deterrence enough for criminals and rogue members of the Bureau of Customs. Higher penalties may be called for.

But my guess is, more than new legislation, full support from Ate Glue is more important in cleaning up Customs and making it deliver what it should in terms of government revenues. If only she gave Balong Arevalo more support, maybe she would not only get high marks for good governance but also get the eternal gratitude of the harassed taxpayer who would not have to pay more taxes to keep her government afloat.