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Importers using JPEPA to cheat gov’t

Philippine Daily Inquirer | 08/10/2009

Importers using JPEPA to cheat gov’t

By Marlon Ramos
Philippine Daily Inquirer

MANILA, Philippines—Importers and brokers have resorted to using a controversial trade agreement between the Philippines and Japan to avoid paying the correct amount of taxes to the government, a ranking customs official said Monday.

He told the Philippine Daily Inquirer that the Bureau of Customs (BoC) came across the new modus operandi after it discovered that a steel company based in Binondo, Manila,and its broker had invoked the Japan-Philippines Economic Partnership Agreement (JPEPA) to allegedly avoid paying more than P50 million in import duties.

The official, who asked not to be identified for lack of authority to speak to media, said the owners of Mayer Steel Pipe Corp. (MSPC) and their broker, Safeway Customs Brokerage Inc., could face criminal charges for bringing in some P200 million worth of hot-rolled steel plates from Japan without paying the proper taxes.

Under the controversial agreement, importers accredited by a JPEPA committee are exempted from paying the seven percent customs tax on all imported goods.

“Basically, this is technical smuggling. The company and its broker tried in vain to use JPEPA as cover,” the BoC official said, adding that the shipment has been seized since the firm has refused to settle its financial obligation to the government.

He showed the Philippine Daily Inquirer copies of the summonses and tax computation sent by the bureau to MSPC.

He said that the bureau was still waiting for a reply from the company, adding that if it does not respond within a given period of time, charges would be filed against the company.

Customs records showed that MSPC’s broker filed an import entry with the bureau’s “super green lane” a day before the cargo arrived on July 22 in an apparent attempt to prevent customs personnel from checking the shipment.

After paying more than P24 million in value-added taxes, the customs official said the broker immediately tried to bring out the shipment from the Manila South Harbor by claiming that it was covered by JPEPA.

“When we sought verification with the Department of Trade and Industry, we found out that while the importer was accredited under JPEPA, its owners [had] failed to secure the needed authority to import,” he added.

“Without the authority to import, DTI said JPEPA-accredited importers must still pay the right duties and taxes to the government,” he said.

 source: PDI