MANILA: The Bureau of Customs (BOC) is confident that the proposed Customs Modernization and Tariff Act (CMTA) will be passed into law next year.
“Hopefully, by January we will have CMTA already,” Customs Commissioner Alberto Lina said as he noted that the House of Representatives had already given its final approval of the bill, which has also cleared the second reading hurdle at the Senate.
In October, the House passed its counterpart version of the proposed law, House Bill 5525, after consolidating 12 different measures seeking the modernization of the BOC.
Last December 14, meanwhile, Senate Bill 2968 was approved during a Senate’s plenary session after winning the votes of all 16 senators present.
The proposed law primarily aims to address the problem of smuggling, which has caused huge revenue losses for the government.
It aims to modernize customs and tariff administration through the full automation of operations, reduce opportunities for corruption and technical smuggling, enact an enabling law to make the local Tariff and Customs Code compliant with the Revised Kyoto Convention, update existing law to more effectively address modern business and trade practices, and reduce the cost of doing business and thus encourage investments.
It declares it is the state policy to protect and enhance government revenues, institute fair and transparent customs and tariff management that will facilitate trade, prevent and curtail any form of fraud and illegal acts, and modernize customs and tariff administration.
The measure defines smuggling as “the fraudulent act of importing any goods into the country, or the act of assisting in receiving, conceiving, buying, selling, disposing or transporting such goods, with full knowledge that the same has been fraudulently imported, or the fraudulent exportation of goods.”
“Goods referred to under this definition shall be known as smuggled goods,” it states.
Technical smuggling is defined as an act of importing goods into the country by means of fraudulent, falsified or erroneous declaration to reduce or avoid payment of prescribed taxes, duties, and other misclassification as to nature, quality or value; undervaluation of price, quality or weight; and misdeclaration of the kind of imported goods.
As to outright smuggling, the bill defines it as “an act of importation documents, or without being cleared by customs or other regulating government agencies, for the purpose of evading payment of prescribed taxes, duties and other government charges.”
The measure also aligns the Customs and Tariff Code with the standards and recommended practices of the Revised Kyoto Convention, harmonizing the country’s procedures with 140 customs administrations and making it easier for traders, importers and exporters to comply with border requirements.
It introduces trade facilitation programs for highly compliant and “low risk” importers that will be eligible for deferred payments of duty and taxes, among others.
