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‘Declare smuggling as economic sabotage’

January 6, 2015

Nueva Ecija First District Rep. Estrellita Suansing

A solon proposed to amend the Tariff and Customs Code of the Philippines to declare any form of smuggling as an act of economic sabotage.

Nueva Ecija Rep. Estrellita Suansing, who authored House Bill 5179, seeks to amend Section 3514 of P.D. 1464 so that economic sabotage refers to “any and all activities that undermines, weakens or renders into disrepute the economic system or viability of the country or tends to bring about such effects, for the purpose of this Act, any violation of Sections 3601 and 3602 of this Act, which involves goods and/or articles with the aggregate value of P1 million, shall constitute as economic sabotage.”

The bill also seeks to amend Section 3601 of the Tariff and Customs Code of the Philippines, pertaining to unlawful importation, and Section 3602, pertaining to various fraudulent practices against customs revenue.

It proposed the following punishments for violators:

a) Fine equal to twice the fair market value of the articles involved;

b) Fine equal to the aggregate amount of the taxes, duties and other charges avoided;

c) Imprisonment of a minimum of eight years and one day up to life imprisonment; and

d) Confiscation of the articles involved.

If the violator is a juridical entity, the penalty of imprisonment shall be imposed on the president and the responsible officers thereof. In addition, the business permits and licenses of the business entity shall be revoked or cancelled. The broker of the violator shall be punished as a principal, the bill provides.

Suansing said smuggling has plagued the national economy, depriving the country of its much needed revenue and crippling key programs of the government.

“Aside from the revenue losses, smuggling constantly poses as a hindrance to the growth of domestic industries. It fosters unfair competition with the local producers and manufacturers, including licensed distributors, wholesalers and retailers,” said Suansing.

The lawmaker cited a report of the Global Financial Integrity which pointed out that the Philippine government has lost at least $19.3 billion since 1990 in tax revenue due to customs duties-evasion through import under-invoicing alone.

Moreover, the report said that combined with an additional $3.7 billion in tax revenue lost through export under-invoicing, the government has lost at least $23 billion in customs revenue due to trade misinvoicing since 1990.

Suansing said the report further said that in 2011 alone, the country lost an estimated $3.85 billion in tax revenues due to smuggling. “The report described the revenue loss as more than double the size of the fiscal deficit and also constituted 95% of the Philippines’ total government expenditures on social benefits during the same year. In the 52-year period covered by the study, the Philippines lost $177 billion through capital flight according to the report,” she said.

She also quoted the Federation of Philippine Industries which cited that from 2002 to 2011, the government lost more than P1.33 trillion in revenue due to smuggling through the country’s ports. (Rowena B. Bundang, Media Relations Service-PRIB)

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