Luxury car importer probed

P1B in duties on Porsches, Lamborghinis shaved, Customs suspect

By: Gil C. Cabacungan, April 13th, 2013 09:10 AM

Bureau of Customs Commissioner Rufino Biazon. RYAN LEAGOGO/INQUIRER.net

MANILA, Philippines—The exclusive distributor of Porsche, Audi, Lamborghini and Bentley is facing scrutiny from the Bureau of Customs (BOC) for allegedly shaving its duty payments to the government by as much as P1 billion over the last five years.

But PGA Cars Inc., owned by the family of billionaire Robert Coyiuto Jr., insisted that this was just part of the regular post-entry audit that should be undertaken by the BOC not only on PGA and other luxury car importers but also on other importers.

“They (PGA) are under audit now for importations—for correctness of declaration. The years under audit are from 2008 to the present,” said BOC Commissioner Rufino Biazon in an interview with Inquirer editors and reporters Thursday night.

When asked how much the government was trying to recover from PGA, Biazon gave P1 billion as “the rough estimate.”

“Our suspicion is that they undervalued their cars,” he added.

All vehicle imports, whether brand-new or used, purchased or donated, are subject to a 40 percent customs duty on top of the 10 percent value-added tax and ad valorem tax ranging from 15 percent to 100 percent, depending on its piston displacement. The vehicle is assessed based on book value and not on its purchase price or acquisition cost.

In a phone interview, Antonio Remollo, director of PGA Cars, said it was ironic that Biazon would single out PGA for its post-entry audit because it was hailed as among the top 10 tax contributors based on duty payments in South Harbor. “No less than Commissioner Biazon and District Colector Roger Gatchalian gave PGA Cars the award last Feb. 4,” said Remollo.

Still, Remollo said his group welcomed the post-entry audit on his company and optimistic that it was not being singled out by the agency.

“If the BOC is true to its mandate, is should also be auditing other importers of high end cars like BMW and CATS-Mercedes Benz, Jaguar and Lexus. This is nothing new to us. The BOC’s post audit three years after making its duty collections to determine whether its valuations are right or wrong so that it will, once and for all, reaffirm that these imports were all above board.”

When asked to clarify, Biazon confirmed in a text message yesterday that the BOC had indeed ordered an investigation of all vehicle importers starting last month. He said the importers being “profiled” were Asian Car Makers, Jaguar Philippines Inc., Cats Motors Inc, Formula Sports Inc, LR Philippines Motors, Standout Motors Inc., Hancars, NVK Car Trading, Greatwall Philippines, Pitstop Philippines and Foton Philippines.

Biazon also said no charges have been filed against PGA. “It is being subjected to compliance audit. This means we are reviewing the transaction values declared by PGA with the Bureau of Customs and we are determining if they are compliant with the mandatory records keeping requirements under the law. We will have to wait for the end of the review process to determine how much will be the assessment,” said Biazon. “On the amount of the possible liability, there is no final figure yet but this is potentially a big amount considering that we are looking at seven years of import transactions.”

Biazon expected to have the results to come out in three to four months.

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