BOC, BIR ordered to zero in on smuggling of rice, fuel, food items

Finance Secretary Carlos Dominguez III has ordered the Bureau of Customs (BOC) and the Bureau of Internal Revenue (BIR) to intensify their campaign against the smuggling of rice and four other commodities as they iron out a plan

to create a joint task force to run after big-time smugglers.

Dominguez told Customs Commissioners Isidro Lapeña and BIR Commissioner Caesar Dulay that they should focus on the smuggling of rice, fuel, steel, cigarettes, chicken, onions, garlic, and other agricultural products.

The Finance secretary issued the directive after Lapeña presented before a recent Department of Finance (DOF) Executive Committee (ExeCom) meeting his plan to form a joint task force with the BIR to help revitalize the Customs’ anti-smuggling campaign.

“Make sure that you're working together there. I think you should focus on fuel, rice and other agricultural products, including chicken, onions, garlic. And then there is steel, and then cigarettes. I'm sure the smuggling of cigarettes will go up now,” Dominguez said.

He noted that after Mighty Corp. had shut down its operations as part of its agreement with the government to settle its tax liabilities, he has been receiving reports of cigarette smuggling as illegal traders rush in to fill the void left by the company, which sold tobacco products at rock-bottom prices.

Mighty had managed to sell its cigarettes at low prices because of the use of fake tax stamps, which was uncovered by the government through a joint operation by the Customs and the BIR.

The company settled its liabilities in income and deficiency excise taxes by paying a whopping 125 billion to the government, which would reach over 130 billion when the value-added tax and other fees are factored in.

Dominguez described Mighty’s tax payment as the “biggest tax settlement” in the country’s history.

He expressed optimism that with the BIR and Customs working together under the planned joint task force, the two revenue agencies can replicate their effort in exposing the tax liabilities of corporations as large as Mighty’s.

Lapeña said at the ExeCom meeting that he wants to “strengthen our partnership and collaboration with the BIR” as part of his five-point priority program to help reform the BOC and beef up its anti-smuggling capabilities.

The BIR welcomed Lapeña’s plan to form the joint task force as it would help both bureaus in effectively enforcing tax laws.

“That is a good thing for us, especially because we are looking for an innovative approach in enforcement. If we do it jointly, it will give us good results,” said then BIR Deputy Commissioner Nestor Valeroso who learned of the BOC plan before his resignation effective Nov. 1.

In his report to Dominguez, Lapeña said his five-point program for the BOC involves: 1) stopping corruption, 2) increasing revenues, 3) ensuring trade facilitation 4) strengthening antismuggling efforts, and 5) enhancing the personnel incentives, rewards system and compensation benefits for BOC personnel.

To put more teeth into the bureau’s anti-smuggling efforts, Lapeña also reported to Dominguez that he has ordered the filing of cases against erring importers and customs brokers and directed “the strict scrutiny of all documents to ensure their authenticity.”