Revenue agencies told to curb gold smuggling
MANILA, Philippines—The Department of Finance wants its two attached agencies—the Bureau of Internal Revenue and the Bureau of Customs—to curb the smuggling of gold out of the country and boost tax collection from the sale of the precious metal.
Finance Secretary Cesar Purisima said the revenue agencies need to strengthen their respective monitoring systems to address the steep drop in gold purchases by the Bangko Sentral ng Pilipinas.
The central bank is tasked to buy gold from small miners in the country.
Purisima said reducing or eliminating the tax on gold sales is not the way to address the problem.
“There should be better coordination between the two arms of the government, particularly the BIR and the BOC,” the country’s finance chief told reporters last week. “It is important that tax laws are implemented. When the process of implementation of tax laws causes some transactions to go underground, that does not give us an excuse to stop implementing the tax laws. It just tells us that we need better enforcement of the laws.”
Gold not sold to the BSP will most likely be exported, he said.
The Customs bureau needs to enhance monitoring to foil any smuggling attempt. Also, the Revenue bureau must continue collecting proper taxes on gold sales, Purisima added.
BIR Commissioner Kim Henares earlier suggested for the Customs bureau to require people bringing gold out of the country to present documentary proof that the precious metal they have with them has been bought from the BSP, and not from other suppliers.
The BSP keeps gold as part of the country’s foreign exchange reserves, which the monetary authority manages.
Smuggling is said to be behind the decline in the central bank’s gold purchases. Small miners have been complaining about taxes and are said to turn to smugglers instead of the central bank.
Under the Tax Code, proceeds of gold sold to the BSP are charged a 5-percent creditable withholding tax and a 2-percent excise tax. The taxes are computed based on the gross amount of gold sales.
Over a year ago, the BIR tightened its collection of taxes by putting desks at all gold-buying sites of the BSP. With the presence of tax men at the buying sites, those selling gold to the BSP could no longer evade paying taxes.
The Mines and Geosciences Bureau earlier reported that the BSP’s gold purchases dropped by over 90 percent to P2 billion in the first three quarters of 2012, from over P32 billion in the same period of 2011.
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