January 28th, 2023
House Ways and Means Chair Joey Sarte Salceda (Albay., 2nd district) said that past legal issues with a Bureau of Customs contract on its computerization program, whose enhancement Salceda is seeking in order to fight undervaluation of imports, should not hamper the Bureau of Customs from carrying out its mandate in an efficient and digitalized manner.
Salceda, during his committee’s Monday hearing on customs undervaluation and smuggling, recommended an automatic alert system that will record and make notice of shipments that are “grossly undervalued compared to a benchmark price for the same commodity.”
This is to address what Salceda pointed out to be “undervaluation to as low as just 1/8 of the total value of a container van of imports” in the port of Subic, which Salceda substantiated with sample transactions provided by the port, as well as calculations from data also submitted by the port itself.
“Let’s revisit the BOC’s computerization programs to prevent smuggling and undervaluation. What can we do with current systems so we can collect more duties and taxes from imports. Otherwise, our tariffs lose their ability to protect domestic industries.”
Customs officials responded that they are constrained from enhancing their computerization program to effect Salceda’s recommendation because of a 2015 injunction by Manila Regional Trial Court (RTC) Branch 47 which sought to stop the BOC from aborting the award of the contract to Omniprime Marketing Inc. and Intrasoft International Inc. for the Philippine National Single Window 2 (PNSW2) project.
The Supreme Court subsequently issued a TRO on the injunction, which has placed the PNSW2 project in what Salceda calls “procurement limbo.”
Salceda said that “a mere issue of procurement with one contract should not prevent the Bureau of Customs from modernizing its valuation safeguards.”
“I will be seeking the opinion of the Department of Justice on whether the injunction prevents them from starting anew with a different project to prevent customs undervaluation.”
In particular, Salceda says he “want[s] to know whether the BOC can just procure for the system from scratch and not have to depend on the resolution of the PNSW2 case. It’s a different system after all.”
Salceda says “that question should be answered, and I think the BOC has been studying that option. We should resolve that matter in time for the budget discussions for 2024.”
“The Constitution and jurisprudence uphold the police power of the State – that is, its ability to enforce the law to protect public welfare. And taxes are the lifeblood of the government. We shouldn’t prevent this mess from enforcing the law more effectively.”