BOC: Fight vs smuggling, corruption ramped up in H1

Bureau of Customs building. (Photo from the Philippine Daily Inquirer)

MANILA, Philippines — The Bureau of Customs (BOC) on Monday said it stepped up its fight against both smugglers and erring personnel within its ranks during the first half of 2022 while protecting government coffers benefitting from a windfall in taxes slapped on expensive oil.

The country’s second-biggest tax-collection agency said in a statement that upon orders of Customs Commissioner Rey Leonardo Guerrero, three BOC personnel were dismissed, 27 relieved, one reprimanded, and seven were suspended while 249 were reshuffled to other offices and ports from January to June. The BOC said the personnel had been found to have engaged in “irregular activities.”

Also, the BOC said its customs intelligence and investigation service “conducted 333 personnel investigations, which resulted in seven filed administrative cases before the BOC’s legal service and another seven cases transmitted to the National Bureau of Investigation (NBI).”

READ: No contact policy, rewards for tipsters: BOC steps vs corruption, smuggling

To protect borders and tax revenues, the BOC during the same six-month period also confiscated P8.4-billion worth of smuggled items across 293 joint seizure operations of its enforcement and intelligence groups.

As of end-June, the BOC seized P5.2 billion in fake goods, P1.7 billion in illegal drugs, and P388.8 million in illicit general merchandise. It likewise prevented the entry into local markets of smuggled agricultural products valued at more than P284 million.

The BOC likewise said that of the 58 letters of authority (LOA) issued in the first six months, 44 caught smugglers.

“Meanwhile, 78 alert orders were issued, 57 of which were positive for violation of pertinent customs laws, rules, and regulations,” it added.

READ: BOC uncovers 100 bogus importers in anti-smuggling drive

Alongside its anti-smuggling drive, the BOC fuel marked 9 billion liters of oil products during the first half, ensuring the collection of import duties and other taxes amounting to P118 billion.

Since the fuel marking program started in September 2019, the BOC injected chemical markers, which signified correct tax payments, into a cumulative 43.7 billion liters of diesel, gasoline, as well as kerosene.

To date, a total of P432.3 billion were collected by the BOC from tax-paid oil, thanks to fuel marking as mandated under the Tax Reform for Acceleration and Inclusion (TRAIN) Law.

“The BOC and the Bureau of Internal Revenue (BIR) seized a total of 111,157.8 liters of diesel, 3,311 liters of kerosene, 18,839 liters of gasoline, and seized two units of tank trucks carrying unmarked fuel with a total estimated value of P14.4 million. Tanks of 16 retail stations and four private companies where the BOC found these unmarked fuels were likewise sealed and recommended for filing of criminal cases,” the BOC said.

READ: Smuggling still lucrative: BOC foils entry of P124-M agri goods

The BOC leads fuel marking in depots, tank trucks, vessels, warehouses, and other fuel-transporting vehicles; the BIR oversees testing in refineries, their attached depots, gasoline stations, as well as other retail outlets.

Since April of last year, the BOC and the BIR conducted random field and confirmatory testing to ensure that oil traders complied with fuel marking. In 2020, the country’s two largest tax-collection agencies were granted with deputization and police authority during field testing. When they find adulterated, diluted or unmarked petroleum, revenue officers can not only seize these products but also arrest unscrupulous traders.

Former finance secretary Carlos Dominguez III had said the huge revenues being collected from oil these days meant that smuggling was on the decline.

It also helped that high global oil prices wrought by Russia’s invasion of Ukraine bloated the import bill.

Costly fuel alongside customs reforms paved the way for the BOC to collect its highest-ever monthly take last June, amounting to P76.3 billion.

Without fuel marking, government estimates had shown that oil smuggling resulted in foregone tax revenues equivalent to over half of the annual duties and taxes being collected by BOC and the BIR, or about P27-44 billion yearly.