Gov’t sets post audit of all rice importers

Following reports that rice traders were undervaluing their imports to evade paying higher taxes, the Bureau of Customs (BOC) said it would issue audit letters to all importers beginning this month as the agency intensifies its post-audit operations.

Customs Assistant Commissioner Vincent Maronilla said in a phone interview that the postaudit would look into historical records of importers, adding that part of the recommendation was to blacklist or permanently block erring companies from participating in the rice trade.

Maronilla said the agency was not at liberty yet to divulge the basis for this recommendation, citing the Data Privacy Act, although more than 40 importers have already been charged for undervaluation between January and March last year.

These companies were ordered to pay a combined P1.4 billion and while some of these importers were now preparing to pay these charges, Maronilla said the majority had filed a motion for reconsideration.

The Federation of Free Farmers (FFF) asserted that undervaluation has worsened this year, claiming that around P2.2 billion in rice duties have already been lost between January and August despite reforms in the valuation and classification system of BOC.

FFF alleged that 81 percent of the shipments declared values lower than the BOC’S reference price and standard rates for shipping and insurance. Declared import costs this year averaged P18.28 a kilo instead of P22.75 a kilo if BOC’S standard rates were applied.

“The extent of undervaluation actually increased compared to 2019 ... Imports were undervalued by only 17 percent on average in 2019 but in just the first eight months of 2020, estimated tariff losses already exceeded the calculated under-collection for the whole of 2019. About 32 percent of imports in 2020 was undervalued by 20 percent or more, compared to only 7 percent in 2019,” FFF national chair Raul Montemayor claimed.

Maronilla noted that most of the entities undervaluing imports were farmer cooperatives that were being used as dummy accounts by other firms, given that cooperatives were given tax exemptions.

Last year, Agriculture Secretary William Dar said they were working toward blacklisting these firms and farmer groups. No updates have been made since.

He added that there were hundreds of these associations that could be guilty of participating in such a scheme.