Part One
IN line with President Duterte’s plan to rid the Bureau of Customs (BOC) of its corrupt image, the bureau and the Department of Finance have implemented a number of measures to help cut red tape and reform the agency.
According to the BOC, one of the reasons the bureau’s image remains to be corrupt, which is what is conveyed to the public, is because of the practice of “tara” or grease money and the benchmarking method used for determining the value of a shipment or cargo.
According to Natalio C. Ecarma III, deputy commissioner for the bureau’s Revenue Collection Monitoring Group, the BOC had received a rating of -68 percent in 2016 and was seen by the public as the least sincere in terms of
fighting corruption.
“I think this is because, consistently, there would be reports of BOC employees engaged in corrupt acts, mainly because the operations and processes were vulnerable to corruption,” Ecarma told the BusinessMirror through e-mail.
Ecarma explained the tara
system as the use of “grease money” to hasten the processing of items or cargo pending at the BOC by companies who want their respective shipments released immediately. This often results in shipments not going through the proper processing system.
“But let me state, though, that not all employees are in this [the practice of tara]. Not all employees are corrupt,” Ecarma said. “In fact, I would say that majority of them are working honestly, doing their jobs efficiently, without anything in exchange except their salaries.”
Reform agenda
NEWLY appointed Customs Commissioner Isidro S. Lapeña has bared his five-point reform agenda for the bureau, taking into account the President’s marching orders to stop corruption in the BOC.
This includes eliminating instances of corruption, increasing revenues, ensuring trade facilitation, strengthening anti-smuggling efforts and enhancing the personnel incentives, rewards system and compensation benefits for BOC personnel.
Lapeña believes the implementation of the reform agenda will eliminate the tara system and stop corruption in the BOC.
In his report to Finance Secretary Carlos G. Dominguez III, Lapeña said topping his priority list is to weed out corruption at the BOC, which he plans to do by implementing the “no tara, no gift and no take” policy at the bureau.
For trade facilitation, the bureau has suspended the use of the customs green lane for the time being, where imports undergo only minimal inspection and verification. The bureau is maximizing the use of its red lanes, with goods passing through the red lane undergoing two levels of inspection to ensure tighter security checks.
To increase revenue collections, the BoC is expected to speed up the collection and forfeiture of outstanding and demandable bonds, order the collection of additional duties, taxes or penalties from post audit, immediately auction off forfeited shipments and overstaying containers and implement the one-strike policy against officials who fail to reach their monthly collection targets due to incorrect or undervaluation of goods under their jurisdiction.
Benchmarking trashed
ACCORDING to Lapeña, the BOC is also doing away with the method of benchmarking, which is the practice of imposing only a discretionary value rather than conducting the proper valuation and accurate assessment of duties, on container shipments.
He said benchmarking is one of the causes of corruption in the bureau.
“What was happening before with the benchmarking, the bureau wasn’t able to collect the right duties and taxes, and it’s [duty or tax] way below the supposed actual collections of the BOC,” Lapeña said.
Citing as an example, a container van valued at P1 million from the value-added tax alone at 12 percent, the BoC should already have collected around P120,000 ($2,340). But, with the benchmarking system, the collection was reduced to a mere P40,000 ($780).
“It is really very low, the government loses a lot,” Lapeña explained. “So I made a directive that it should be correct valuation, what is provided for by law.”
The customs chief has also abolished the Command Center set up by his predecessor Nicanor E. Faeldon and directed the strict implementation of a provision in the Customs Modernization and Tariff Act on completing the inspection of container vans within 24 to 48 hours.
Leveled field
Lapeña said these moves are expected to further enhance trade facilitation in the country.
“And, of course, to strengthen the implementation of the BOC mandate, I abolished the command center,” he said. “This is the one with a lot of issues that are being raised.”
Lapeña also vowed to implement a level playing field for all importers by upgrading and computerizing customs systems and processes, and reviewing the requirements and processing time for accreditation.
“We don’t want the bench-marking; it should be correct valuation. If we are able to implement the correct valuation, then we should be hitting a much higher collection of revenues,” he added. “And I am optimistic that by next year we should be hitting our target or above the target.”
To strengthen anti-smuggling efforts, Lapeña said he has ordered the filing of cases against erring importers and customs brokers and directed the strict scrutiny of all documents to ensure their authenticity.
Plans to create a joint task force with the Bureau of Internal Revenue to intensify the government’s anti-smuggling campaign and improve the collection of import duties and taxes were discussed with the finance chief.
Lapeña’s plans
As part of his program to enhance the rewards and incentive system in the bureau, Lapeña had promoted 515 BOC employees. He prioritized seniority having discovered that the oldest staff had not been promoted for 30 years.
A review of the rewards system for employees will also be done under his watch, he said. According to Lapeña, such a
system is expected to fast-track the promotion and hiring of personnel to fill in vacant positions. He also plans to establish a Counter-Intelligence Service and Internal Affairs Service within the bureau, among other measures.
Lapeña has also made good on his promise to implement the one-strike policy at the BOC, which has led to the relief of district collectors in the Port of Manila and the Manila International Container Port (MICP). The implementation of the policy also led to recommendations to remove other personnel in these two offices.
Lapeña also ordered surprise visits and inspections in Manila’s ports, which led to the arrest of an MICP security guard and two of his accomplices, who were allegedly caught in the act of receiving money from truck drivers.
The collection by the MICP guard and his cohorts has led to a long line of trailer trucks and container vans at the MICP gates.
To be continued
Image credits: Nonie Reyes