The Senate is on track to consider passage of remedial legislation legalizing the popular ukay-ukay stalls and regulate importation of second-hand garments and goods.
Senator Raffy Tulfo moved to legalize and regulate the importation of ukay-ukay or imported second-hand garments and goods, which, he noted, has already evolved as part of the Filipino culture.
In filing Senate Bill (SB) No. 1778, Tulfo triggered the process of repealing Republic Act (RA) No. 4635 prohibiting the commercial importation of used clothing and rags that has long been observed openly in the breach.
Although ukay-ukay business is deemed illegal pursuant to aforesaid law, the senator noted, “there has been a proliferation of the ukay-ukay business because of the ineffective implementation of the applicable law banning it.”
“The ukay-ukay industry has evolved as part of the Filipino Culture,” he reminded adding, “It goes without saying that the revenue-generating industry has generated jobs for our fellow Filipinos. However, it must be regulated by the proper government agencies to ensure its compliance with applicable laws.”
The Tulfo bill’s explanatory note added: “Pursuant to the proposed bill, the P18 billion industry will no longer be an underground enterprise since it will be duly registered and its revenues audited for accountability by the proper government agencies.”
Prior to filing Senate Bill 1778, Tulfo recalled raising the idea of legalizing the commercial importation of ukay-ukay last year, noting the failure of the Bureau of Customs (BOC) to control its influx in the country.
The lawmaker lamented “small-time sellers are obliged to pay taxes, while the importers are not paying their duties to the BOC.”
In filing the measure, the senator stressed the need to investigate the BOC and the Philippine Economic Zone Authority (PEZA) to ensure that ukay-ukay will not be smuggled and misdeclared as used rags that are free of taxes and duties.
“To stop smuggling,” he suggested, “All locators in PEZAs [export processing zone authorities] should have factories with proper machineries to process raw products/materials that will be re-exported and in turn generate money for the government.”
Moreover, he recalled that previous Customs investigations found that certain locators inside economic zones, like Bataan, Laguna, Cavite, Cagayan, Baguio, Clark and Subic Freeport zones, use their privilege to import raw materials tax-free to smuggle used clothing in the guise of scrap fabric.
These locators then sell the used clothing to dealers who then supply local ukay-ukay business owners.
The lawmaker likewise stressed the need to further consult the Department of Trade and Industry (DTI), the local garment manufacturers and other stakeholders for their inputs to further improve his proposed law.
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