Industry lobby estimates VAT revenue foregone due to smuggling at P250B
THE PHILIPPINES loses P250 billion worth of value-added tax (VAT) revenue from smuggling, the Federation of Philippine Industries (FPI) told the Senate on Tuesday.
Speaking before the Senate Committee on Justice and Human Rights, FPI Chairman Jesus L. Arranza said, “We are losing, the last time we made a study, P250 billion in value-added tax and downsizing of companies.”
The committee is deliberating Senate Bill No. 1963, which seeks to address the smuggling of agricultural commodities. One of the proposals is to create a specialist court that will exclusively handle all such cases.
Under the measure, all violations of Republic Act No. 10845 or the Anti-Agricultural Smuggling Act will fall under the jurisdiction of the proposed court.
Rosendo O. So, chairman of Samahang Industriya ng Agrikultura, said that the Ports of Manila, Subic, and Batangas are common entry points for smuggled products.
Florina C. Agtarap, State Counsel at the Justice department, told the committee that from 2016 to February 2023, 48% or 76 of the 159 cases it received from the Customs bureau and the Agriculture department were dismissed due to lack of documentation.
She said only nine cases have been filed in court in seven years, all of which are ongoing.
Mr. Arranza noted that the proposed court should also specify industry standards for manufactured products.
“The special court should focus on (industry standards). There’s standards for glass manufacturing… two courts have issued injunctions. It’s been three and a half years, (yet) there’s still no standard. Who will be held accountable when earthquakes happen and people die?” he told the panel.
“The problem is if (products are) smuggled, then (they do not conform to any) standard,” the Committee Chairman, Senator Francis N. Tolentino, said.
Judge Danilo S. Cruz, president of the Philippine Judges Association (PJA), proposed to establish anti-agricultural smuggling courts in various regions, to be classified at the same level of regional trial courts.
“There is no need to create a special body,” Mr. Cruz told senators.
PJA Vice-President-Administration Gener M. Gito, also a judge, added: “Instead of actually creating a court, another division may be added to the Court of Tax Appeals (CTA), which will be designated to hear and decide smuggling cases.”
The CTA has exclusive jurisdiction over criminal cases involving violations of the Tariff and Customs Code, Mr. Gito said.
Noting the low number of smuggling cases filed with the court, “building another set of courts might be a waste of money for the government,” Pia Cristina B. Bersamin-Embuscado, PJA Public Relations officer and also a judge, told the panel.
A technical working group has been formed to fine-tune the bill. — Beatriz Marie D. Cruz