dissecting import smuggling by kritiko research series
TRANSCRIPT
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Dissecting Import SmugglingBy Kritiko Research Series
Section 1, in the General Rules for the Interpretation of the
Harmonized System is the category for the importation of Live Animals *
Meat & Edible Meat offal * Fish & Crustaceans, Molluscs& other aquaticinvertebrates * Dairy products * Birds eggs * Natural Honey * Edible
products of animal origin * Products of Animal Origin
ISO standard:
US Intermodal containerSource: Wikipedia
Standard Lengths = Gross Mass for Dry Cargo
20-ft (6.1m) = 22,000 kg to 24,000 kg.
40-ft (12.2m) = 27,000 kg to 30,480 kg.
Section 1: Chicken
In this edition, we will feature everyones favorite CHICKEN and chicken
parts. Specifically, LEG QUARTERS, MDM and Machine Separated parts - all
were imported from the US and Canada. None of the imports would be
considered AFTA / Free Trade and should therefore be subjected to the
required duties and taxes. To best understand the study, each assumption
will based on a group of chicken parts as imported. Study period is July to Aug.
5, 2011
As we are not familiar with the code MDM, we will have to assume that
this would be chicken parts. Hence, the total shipment of chicken will be
analyzed.
The shipment comprised of 12 containers of Leg Quarters + 10 containers of
MDM + 24 containers of machine separated chicken = 46 containers.
A total of Php3,220,155 in Taxes were paid by the importers for all 46
containers.
If the ISO standard weight per 40-footer container is 27,000 kg. Then it is
safe to assume that a total of 1,242,000 kg. of chicken arrived. With an average
market value of Php120/kilo. That would mean Php149,040,000 worth of
chicken will go into the market.Now, if 40% taxes will be charged, then the taxable amount should be
Php5,916,000. Whereas, only Php3,220,155 was paid in duties and taxes.
Hence, a discrepancy of at least Php2,695,845 was not collected.
If Php3,220,155 was charged in taxes, divided by the 46 containers, then the
average tax per container is only Php70,003.
If Php70,003 average tax per container is divided by the 27,000kg. Then a
1kg chicken is worth Php2.59/kilo
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What are the implications? For one, importers paid a paltry amount to the
BoC for the chicken we buy in the market / grocery for Php120 per kilogram.
Local poultry growers will never be able to compete with the imported
chicken supply as these average a mere Php2.59 per kilo. Which would
definitely be a loss for the poor farmer.
While we consumers may seem to find the prices of chicken lower due to itsstock importation, think about how we are literally pulling the feathers of our
local growers and killing the supply chain from feeds to the actual broiler
chickens.
Dissecting Import Smuggling: Section 1: BeefBreeding of livestock in the Philippines is done in two ways, the backyard
system where one or a few heads of cattle are kept within the confines of the
owners home property. And in cattle farms where headcount and a better
system is of great importance.
In the Harmonized System of the Bureau of Customs around the world,
Livestockcomprise of Hogs, Cattle, Carabao, Goat and its by-products Dairy
Milk. With Cattle being a high value livestock worth millions.
According to a study on the Philippine livestock industry, an estimated totalof 800,000 jobs are generated by all stages of the breeding process. Nearly
500,000 jobs are generated by breeders alone.
In the year 2003, the industrys income has been an estimated Php10
billion. That is for domestic breeding intended for either local consumption or
exports.
Broken into specific categories, livestock value reached Php117 billion.
With cattle bringing in an estimated Php14.3 billion.
Immediate concerns of the industry include: Increasing finished weight per
unit of production by finishing local cattle in the feedlot. Sustaining the overall
population growth and arrest the decline of the commercial sector.And
achieving a total system of production and marketing.
Unfortunately, while the local cattle breeding industry continue to suffer
the high cost of production , feeds and operational expenses, the unscrupulous
entrepreneur manages to import their supply with minimal expenses.
No longer will we assume that such importations are used only by hotels and
industrial users, simply look into open shelving display of popular
supermarkets to see why.
This section aims to illustrate, using an actual list of shipments declared
under the category of BEEF the financial and stock values which affect our
industry. Note that the figures only cover July to August 4, 2011 one month.
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Dissecting Import Smuggling : Section 1: BEEF
& BUFFALO(Period: Bureau of Customs Imports July to August 3, 2011)
STUDY:Imported Beef from New ZealandA total of9 containers arrived with an estimated total weight of216,000 kg.Section 1 of the Bureau of Customs charged a total of Php639,089 for duties
and taxes. Which then means an average of Php71,009.00 in taxes were
charged per container.
If the Market Value of the Imported Beef was Php260/kilo x 27,000 kg/cont.
= Php7,020,000 total value inside that container!
Since the shipment came from New Zealand, then taxes should be charged.
Assuming 40% represented duties & taxes, then each shipment should average
Php2,808,000. A 50% discrepancy of Php1,404,000 in taxes far from the
average of Php71,009 per container charged!
Hence, we lost an estimated Php6,380,911 in uncollected duties from the
NZ beef!
FACT: Imported Beef from AustraliaA Total of 9containers with duties and taxes of Php1,091,582 were collected
by Section 1 of the Bureau of Customs. Which means each container had an
average of Php121,286.00 in taxes.
9 containers x 27,000 kgs/cont.= a total weight of 243,000 kgs. of beef
entering the market system.
If the Market Value of the beef was Php260/kilo, this means the estimated
value of the 9 containers would be Php63,180,000!
If the Php63,180,000 MVis charged a 40% tax = Php25,272,000 should have
been the taxes.
Assuming 50% discrepancy = Php12,636,000 should have been collected by
Section 1 of the Bureau of Customs. This means a loss of revenue amountingto Php11,598,418 for beef from Australia. (According to an Aussie show on
cable, hormones are added to the cattle to ensure weight gain.)
FACT : Imported Beef from USAOnly 5 containers arrived in the month, with a total duties & taxes of
Php613,963 collected by Section 1 of the Bureau of Customs.
5 containers x 27,000kgs/cont. = a total weight of 135,000 kgs. of beef were
shipped into the country.
Php260/kilo Market Value x 135,000kgs. = Php35,100,000 in market value.
Which means a container of USA beef average Php7,020,000! Whereas the
average taxes collected per container amounted only to Php122,792. A
difference of Php6,897,208 were not collected per container!Assuming a discrepancy again of 50% still translates to Php3,448,604 was
not collected for each container heading for Section 1 of the BoC.
FACT: Imported Beef from France & IndiaOnly 1 container arrived from France, with taxes charged by Section 1 at
Php1,765. And only 1 container from India, with taxes at Php1,765.
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The Impact of this months imported BeefA total of 16 containers arrived, with an estimated weight of 432,000
kilograms of beef in various cuts and forms.
Out of the 16 containers, only a total of Php2,348,164 was collected by Section
1 of the Bureau of Customs. Which means an average of Php14,676 was paid
for import duties and taxes.
Assuming 16 containers x 27,000kg./cont. = 432,000 kg. That means at
Market Value (MV) Php260 / kilo = Php112,320,000 million worth of beef
were imported in July to August alone.
Assuming (again) a 40% in taxes = Php44,928,000 should have been collected
by the BoC. A difference of Php42,579,836 in uncollected taxes!
At a 50% discrepancy rate, that means Php21,289,918 loss in our revenue
coffers.
Conclusions:Importing beef from the US, NZ, AU, FR & India will prove more lucrative
than breeding those smelly cattle locally! Assuming our revenue sufferedPhp21,289,918 in losses for a month x 6 imports of the same system
annually, that would translate to a massive Php127,739,508 million a year!What are the economic implications on the Filipinos working in cattle farms
and breeding smelly cows in their backyard? What of the many local industriescrying in pain due to the difficulty of breeding? Compare that to handful ofimporters in their Export Entries and you will see the difference.
Section 1 of the Bureau of Customs must be laughing all the way to the bankespecially since the BoC Commissioner is leaving (again). Another learningcurve gap is enough to squeeze more technical smuggling into the honeymoonstage of the newbie.
Dissecting Import Smuggling :Section 1 : Dairy Milk(Period: Bureau of Customs July to August 5, 2011)Sources :BoC documents
&www.fao.org/ag/againfo/programmes/en/pplpi/docarc/LLAX14.pdf
The Philippine Dairy Industry by Salvacion M. Bulatao Administrator
National Dairy Authority, Philippines
Unless youre allergic to milk or lactose intolerant, you and your family will
require a daily dose of milk in one form or another. The Philippine has beenfound by the National Dairy Authority (NDA) as a huge market for milk and
milk products.According to a study by SalvacionBulatao, the dairy market generates sales
amounting to US$1.1billion annually. Australia, New Zealand and the USAsupply 80% of milk imports. Milk powder comprises 71% of the imports.
Around 8,000 dairy farming families in 223 villages are engaged in milkproduction. They pour milk to over 100 dairy cooperative accounting for 23%of national liquid milk supply, which translates to 11 million kilogram of milkfrom some 8,900 milk animals.
http://www.fao.org/ag/againfo/programmes/en/pplpi/docarc/LLAX14.pdfhttp://www.fao.org/ag/againfo/programmes/en/pplpi/docarc/LLAX14.pdf -
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The NDA study states that there is a growing consumer preference for liquidmilk. UHT milk imports have trebled since 1995, while milk power importshave remained constant over the same period.
There is also a surge in demand for milk from local milk producers from theleading coffeeshops in Metro Manila.
Some 10,774 children are fed in milk feeding programs. While countlessmore in the population require and consume milk in one form or another.Dissecting the import smuggling on milk and its other importcheesewill ourfocus on this edition. Study duration covers the month of July to August 5, 2011and shall be based on real importations covering entry numbers and passing thruSection 1 of the Bureau of Customs.
For the record, Section 1 of the BoC is manned by the following personnel :Section 1-A : Principal Appraiser Emelita Morales & Principal ExaminerLourdes Guevarra. Section 1-B : Principal Appraiser Ma. Teresa Aggabao&Principal Examiner Akmad Noor. This edition will welcome theirenlightenment should they provide us with a written explanation.
FILLED MILK imported from New Zealand & Australia:
A total of 8 containers x 40 footers entered the country with total duties&taxes collected amounting to Php490,833.
IF: Php490,833 8 containers = average tax per container Php61,360
IF : Php61,360 per container 27,000 kg. per container = Php 2.27 per kilo
IF : We buy 500gms milk at Php120 in the grocery x 2 = Php320per kilo market
value of filled milk x 27,000kg./container = Php8,640,000 would be the
approximate Market Value of each container.
Since the milk was imported from non-AFTA countries, then we have to
assume that duties & taxes should be about 40% = Php3,456,000
At 50% discrepancies on our estimates = Php1,728,000 per container of the
imported milk.
IF: Php1,728,000 x 8 containers = Php 13,824,000 estimated collectibles.
Whereas, the 8 containers garnered Php490,833.
Difference in uncollected taxes estimated at Php 13,333,167
SPECIAL MILK (whole milk, full cream low fat, lactose,
milk lactose, buttermilk) imported from New Zealand, Australia,USA, Denmark, France & Taiwan)
A total of 39 containers x 40 footers & 3 containers x 20 footers entered with
total duties & taxes collected by the BoC amounting to Php14,243,116.
So as not to confuse our readers, we shall only analyze the 39 x 40 footers:
IF: 39 containers x 27,000 kgs. per container = 1,053,000 kgs. imported
IF: Php13,247,058 was the total tax collected = average tax per container is
Php339,668
IF: Php339,668 taxes 27,000 kgs = Php12.50 per kilo of milk
IF: Php13,247,058 for the 39 cont. 1,053,000 kg = PHp12.58 per kilo
IF: Special milk is sold in the groceries/drugstores at Php200 to Php700 per
500gms. A conservative estimate of Php400 per kilo in Market Value x
1,053,000 kg.on imports = Php 421,200,000 Market Value
IF: Market Value of the imports x 40% for taxes = Php168,480,000 taxes
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IF: Our mistakes /discrepancies is 50% = Php 84,240,000 in taxes
Whereas, theBoC collected Php14,243,116 for the 39containers
Difference: Php 69,996,884 in uncollected taxes for the 39x40footers
Cheese (Danish blue cheese, Flavored cheese, Natural
Mozzarella Cheese & Asstd. Processed cheese) fromSingapore, Denmark, Australia, New Zealand
A total of 6 containers x 40 footers entered the country with a total duties &
taxes collected by the BoC amounting to Php2,444,183
IF: 6 containers Php2,444,183 = average taxes of Php407,363 per container
IF: 6 containers x 27,000kg. = 162,000kgs. of cheese
IF : 162,000kgs. Php407,363 taxes = Php15 per kilo of cheese
IF: Average grocery/market value of the cheese Php3,000 per kilo x
162,0000kgs. = Php486,000,000 market value of the cheeseIF : Php486,000,000 at 40% taxes = Php 194,400,000 in taxes
IF: Discrepancies will be at 50% of total estimates = Php 97,200,000 in taxes
Differences: Php2,444,183 in taxes collected by the BoC
Less: Php 97,200,000 = Php94,755,817
Dissecting Import Smuggling
Section 1 : Fish. Shrimp &SquidFish is the primary source of protein in the Filipino diet. Some 2,000 species
abound in Philippine waters. Despite more than a doubling in output since the
1960s, the fishing industry remains relatively undeveloped, and large quantities
of fish are imported. The Bureau of Fisheries and Aquatic Resources (BFAR)
cites the continued environmental degradation of Philippine waters as a major
constraint on fish production.
In 2000, the total domestic fish catch was 1,892,832 tons (12th in the world),
of which 8% came from inland waters. Exports of fish products in 2000 were
valued at $400 million.
Six species are most important, according to BFAR, because each has yielded
100,000 tons per year or more since the mid- 1980s. These species are:sardines, roundscad, frigate tuna, anchovies, milkfish, and tilapia. Indian
mackerel, skipjack and yellowfin tuna, sea bass, red snapper, mullet,
kawakawa, squid, and prawn are also plentiful.
Principal commercial fishing grounds are off Palawan, north of Panay and
Negros, and to the south and west of Mindanao. Subsistence fishing is
conducted throughout the archipelago. Fish ponds, chiefly for cultivation of
bangos or milkfish, are principally in the swampy coastal areas of western
Panay and around Manila Bay.
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Pearl shells (including cultured pearls), sponges, sea cucumbers (trepang),
shark fins, and sea turtles are exported.
Fishermen communitiesMunicipal fisherfolk are considered the poorest among the poor. In 2000,
households whose heads were fishers had a significantly higher poverty
incidence than households in general. Their daily income was roughly the
retail value of 2 kg of fish. Low incomes can be attributed to declining fish
catch, estimated to be about 2 kg per day, down fromthe 20 kg per day that
was the average catch during the 1970s.
Households of fishers and those in the fishing industry also had heads with
relatively lower education levels compared with households in general. Fishers
households had lower access rates to basic necessities like safe water,
sanitary toilets and electricity than other households, and were more likely to
live in makeshift houses or were squatting. Also, the average size of
households of fishers and of those in the fishing industry was greater than the
national average (Israel, 2004).
According to the 2002 Census of Fisheries, there were 1.8 million municipal
and commercial fishing operators. This was a three-fold increase from the 584,
000 fishing operators recorded in 1980. Municipal fishing dominated the fishingindustry in terms of numbers of operators. In 2002, 1.78 million operators
(99.6%) were engaged in municipal fishing compared with only 7 800 in
commercial fishing operations.
The vast majority of municipal fishing operations (1.752 million or 98.4%)
were individual operations. At 1.7 million, male operators accounted for 94.5%
of the municipal fishing operators, with a median age of 41 years.
In 2002, out of 7,200 commercial fishing operations, 7,190 were operated by
individuals, and almost all (98.6%) were males, with a median age of 39 years.
Women have a role in fisheries and helping in the livelihood of the family
(Siason, 2004). Their roles include: (1) fish marketing or vending, (2) fish
processing, (3) fry gathering, (4) gear preparation, (5) fishing, (6) net mending,
and (7) fishing boat ownership and operation.
Source:http://www.nationsencyclopedia.com/Asia-and-Oceania/Philippines-
FISHING.html#ixzz1YLAbs3RB
Source:http://www.fao.gov.com
This edition will cover 15 actual importations within July to August 3, 2011.
All going thru Section 1 of the Bureau of Customs manned by its Prinicipal
Appraiser and Principal Examiner. A total of 20 containers were released withtotal Duties and Taxes of merely Php656,974.
Declared: Frozen Cooked Peeled Shrimp
This month, only 1unit of 40-footer container of very expensive shrimp fromMalaysiawas imported. Duties and Taxes paid = Php84,743.
http://www.nationsencyclopedia.com/Asia-and-Oceania/Philippines-FISHING.html#ixzz1YLAbs3RBhttp://www.nationsencyclopedia.com/Asia-and-Oceania/Philippines-FISHING.html#ixzz1YLAbs3RBhttp://www.nationsencyclopedia.com/Asia-and-Oceania/Philippines-FISHING.html#ixzz1YLAbs3RBhttp://www.nationsencyclopedia.com/Asia-and-Oceania/Philippines-FISHING.html#ixzz1YLAbs3RB -
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If: the standard capacity weight of a 40-footer is at a minimum of 27,000kgs.
Taxes charged Php84,743 = Taxes Php3.14 per kilo
If: average Supermarket Value Php 600/kilo x 27,000kgs = Php16,200,00MV
If: TCCP EO334 is 5%: Php16,200,000 MV x 5% = Php810,000 should have been
the Duties & Taxes.
If: our Discrepancy is 50%, thenPhp405,000 should have been collected.
Difference: Php320,257 in uncollected tax.
Declared : Giant Squid Fillet Skinless
4 containers x 40 footers from CL-Chile & US, with total duties & taxes =
Php155,218.
If: Weight is 27,000kgs. minimumx 4 containers = 108,000kgs. in all
Php155,218 taxes = Php.69 centavos tax/kg. only
If: MV is Php300/kg x 108,000kgs. = Php32,400,000 total MV.
If: TCCP EO334 is 5% : Php32,400,000MV x 5% = Php1,620,000 should have
been the Duties & Taxes.
If: our Discrepancy is 50%, the Php810,000 should have been the Duties &
Taxes.
Difference: Php654,782 in uncollected taxes.
Declared :Frozen Whole Shell Mussels
1 container from CL-Chile was imported with total duties & taxes =
Php19,207
If: Weight is 27,000kgs minimum Php19,207 taxes = Php0.17 centavos /kilo!
If: MV is Php300/kg x 27,000 kgs. = Php8,100,000MV
If: TCCP EO334 is 5%: Php8,100,000 x 5% = Php405,000 should have been the
Duties & Taxes.
If our Discrepancy is 50% , then Php202,500 should have been collected.
Difference: Php183,293 in uncollected taxes.
SECTION 1 : The Importers
ORO CAMPO TRADING
RM 3A ENRIQUETA BLDG., N. S. AMORANTO,, QUEZON CITY, NCR, SECOND
DISTRICT, NATIONAL CAPITAL REGION (NCR)
DTI-Registered
ROYAL GLOBE ENTERPRISES
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eBNRS Search
No Matching Records Found.
FEDERAL FOOD CORP.
SEC-Registered
FEDERAL FOOD CORP.
SEC-Registered
DYNAMIC FOOD OPPORTUNITIES CORP.
SEC-Registered
UNIFIED FOOD CORP.
SEC-Registered
FAIRFIELD GENERAL MERCHANDISE
UNIT 19 TIMOG ARCADE, # 67 TIMOG AVE., COR. SCOUT TORILLO,, SOUTH
TRIANGLE, QUEZON CITY, NCR, SECOND DISTRICT, NATIONAL CAPITAL REGION
(NCR)
DTI-Registered
MOFELS FOOD INTL. CORP.
SEC-Registered
FIRST CROCUS PHILIPPINES INC.
SEC-Registered
PURO CARNE INTL. CORP.
No Records Found
TRIANGLE SISTERS TRADING
DTI-Registered
National Scope
ZENITH FOODS CORPORATION
No Records Found
FRESH N FAMOUS INC.
No Records Found
THE PACIFIC MEAT CO. INC.
No Records Found
CLASSIC FINE FOODS INC.
SEC registered
BENISAND MERCHANDISING CORPORATION
SEC-Registered
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DELFI FOODS INC.
No Records Found
NUEVA FOODS CORP.No Records Found
FOODSPHERE INC.
SEC Registered
THE PUREFOODS HORMEL CO. INC.
No matching records found
APM AGRICOM INC.
SEC Registered
Dissecting Import Smuggling : The Section 1
Summary
Section 1, in the General Rules for the Interpretation of the
Harmonized System is the category for the importation of Live Animals *Meat & Edible Meat offal * Fish & Crustaceans, Molluscs& other aquatic
invertebrates * Dairy products * Birds eggs * Natural Honey * Edible
products of animal origin * Products of Animal Origin
This edition will contain the figures acquired from some importations in the
month of July and up to August 3, 2011 only. For clarity, presentation shall be
in its mathematical format. Previous editions contain the individual
breakdowns. You, dear reader, can help with the analysis later.
DECLARED IMPORTS CONTAINERS
(QUANTITY) TAX PAID TO SECTION 1
Frozen PORK- CA, US, FR, DK, AU, IE, NL, GBBelly rind & skin 8 x 40 footers Php1,809,348Back skin 1 x 40 footer 59, 941
Cutting Fat 3 x 40 footers 206,099
Ham Fat 6 x 40 footers 227,971
Minced Fat 1 X 40 footer 28,332
Sirloin Boneless 2 X 40 footers 380,891
Boneless Ham 4 x 40 footers 397,362
Ham / Ear Base 21 x 40 footers
Mask / Liver 2 x 20 footers 2,126,376
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TOTAL FROZEN PORK 46 X 40 footers
& 2 X 20 footers Php5,233,360
1,286,000 kgs.
If: Taxes paid Total weight = Php 4.10 average tax per kilo
Discrepancies Found: Php43,679,320 uncollected
DECLARED IMPORTS CONTAINERS
(QUANTITY) TAX PAID TO SECTION 1
Frozen CHICKEN- US, CA, NLLeg Quarters 12 x 40 footers Php1,644,164
Chicken MDM 10 x 40 footers 393,990
Mech. Separated 24 x 40 footers 1,257,001
Deboned Meat 1 x 40 footer 40,257
TOTAL FROZEN CHICKEN 47 X 40 footers Php 3,340,412
1,269,000 kgs
If: Taxes Paid Total Weight = Php2.63 average tax per kilo
Discrepancies Found: Php2,695,845 uncollected
DECLARED IMPORTS CONTAINERS
(QUANTITY) TAX PAID TO SECTION 1
Frozen BEEF & BUFFALO NZ, AU, US, FR, INDIABoneless / Boneless Fat
Tripe Scalded/ Shortplates
Chuckblade / Bone in 24 x 40 footers Php2,230,272
648,000 kgs.
Buffalo Quarters 7 x 40 footers Php1,725,262
189,000 kgs.
TOTAL FROZEN BEEF & BUFFALO
837,000kgs Php3,955,534
If: Taxes Paid Total Weight = Php2.63 average tax per kilo
Discrepancies Found: Php 44,928,000 uncollected on BEEF
DECLARED IMPORTS CONTAINERS
(QUANTITY) TAX PAID TO SECTION 1
Frozen BEEF & BUFFALO NZ, AU, US, FR, INDIABoneless / Boneless Fat
Tripe Scalded/ Shortplates
Chuckblade / Bone in 24 x 40 footers Php2,230,272
648,000 kgs.
Buffalo Quarters 7 x 40 footers Php1,725,262
189,000 kgs.
TOTAL FROZEN BEEF & BUFFALO
837,000kgs Php3,955,534If: Taxes Paid Total Weight = Php2.63 average tax per kilo
Discrepancies Found: Php 44,928,000 uncollected on BEEF
DECLARED IMPORTS CONTAINERS
(QUANTITY) TAX PAID TO SECTION 1
DAIRY MILK NZ, AU, TWN, US, FR, SG, DKFilled Milk/ Whole / Full Cream /
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Low Fat / Lactose/ Milk Lactose
Buttermilk 39 x 40 footers Php13,247,058
3 x 20 footers Php 886,058
TOTAL DAIRY MILK 1,253,000 kgs. Php 14,343,116
If: Taxes Paid Total Weight = Php11.44
Discrepancies Found: Php 83,330,051
DECLARED IMPORTS CONTAINERS TAX PAID
(QUANTITY) TO SECTION 1
CHEESE SG, DK, AU, NZ
Danish Blue, Flavored,
Natural Mozzarella,
Asst. Processed 6 x 40 footers Php 2,444,183
TOTAL CHEESE 162,000 kgs. Php2,444,183
If: Taxes Paid Total Weight = Php15.08
Discrepancies Found: Php94,755,817
DECLARED IMPORTS CONTAINERS TAX PAID(QUANTITY) TO SECTION 1
FROZEN SEAFOOD MY, TWN, CN, VN, CL, US
Peeled Shrimp, Giant Squid,
Whole Shell Mussels,
Fish Cakes, Fillet, Meat
Trout, Mackerel 19 x 40 footers Php 656,974
5,245,798 kgs.
TOTAL SEAFOOD 438,798 kgs. Php 656,974
If: Taxes Paid Total Weight = Php 1.49 per kilo
Discrepancies Found: Php 25, 670,906
Section 1: Frozen Pork, Chicken, Beef, Buffallo, Dairy Milk, SeafoodImported from July to August 3, 2011:
Total BoC Tax Collection = Php 29,973,579
Total Est. Uncollected Taxes = Php295,059,939(based on % Duties & Tax @ Market Value)
Section 1-B (Boc) : Apple, Oranges,
Grapes & Pears
Section 2under the Harmonized System Code: Live trees & other plants, bulbs,roots & the like, cut flowers & ornamental foliage; Edible vegetables & certain roots
and tubers; Edible fruit & nuts ; peel of citrus fruit or melons; Coffee, tea, mate &
spices; Cereals, Products of milling industry; Malt; Starches ; Inulin; Wheat glutten; Oil
seeds & oleaginous fruits; Misc. grains, seeds & fruits; Industrial or medicinal plants,
straw & fodder; Lac; Gums, resins & other vegetable saps & extracts; Vegetable plaiting
materials; Vegetable products not elsewhere specified or included
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Sources:
Philippine Bureau of Customs
www-2.knu.ac.kr/~iatc/spboard/board.cgi?id=report&action...
www.unctad.org
The Philippines a National Case Study on Capacity Building
by Alex F. Favila
The Philippine processed and fresh fruits industry combined constitute a
94% majority of horticultural exports. In 2004, total fruit exports grew at an
average of 15.07%, with growth in first place of total horticulture.
The fruit industry plays an important role in the Philippine agriculture and
economy. Three most important fruits are banana, pineapple and mango
which contribute 90% of the total volume of production and 10% to other
fruits.
Hence, the importation of fruits which our country have limited propagation
conditions must be closely monitored to ensure the safety of consumers both
for health and economic reasons.
The smuggling of imported fruits not only destroys the balance of economics
for business. Unrestricted entry via technical smuggling in cahoots with corrupt
officials at the Bureau of Customs pose a serious health risk to the consumers
who purchase the products with questionable propagation methods.Earlier findings of extreme usage of pesticides and formalin for preservation
in imported fruits and vegetables have proven detrimental to the Filipinos.
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FRESH APPLES China, US, Chile1 box of apples = 20 kgs. ave. weight
1 box of apples = Php1,000 Market Value
40footer container = 27,000 kgs capacity
A total of 12 x 40-footer containers were imported in 1 month.
IF: 12 containers x 27,000 kgs./cont. = 324,000kgs. importedIF: Weight 20kgs./box = 16,200 boxes imported
IF: 16,200 boxes x Php1,000 MV = Php 16,200,000.- Market Value
IF: Php16.2million MV x 40% tax = Php6,480,000 taxes for 12 containers
IF : 50% Discrepancies = Php3,240,000.- tax collectibles
Whereas: Total Tax collected by BoC for the 12 containers = Php162,768.-
Hence, the BoC Sec. 1-B failed to collect Php3,077,232 in taxes
FRESH ORANGES US & Argentina (AR)1 box of oranges = 20 kgs. ave. weight
1 box of oranges = Php1,500 Market Value
40 footer container = 27,000 kgs. capacity
A total of 7 x 40-footer containers were imported in 1 month.
IF: 7 containers x 27,000 kgs./cont. = 189,000 kgs. imported
IF Weight 20gs./box = 9,450 boxes imported
IF: 9,450 boxes x Php1,500 MV = Php14,750,000 Market Value
IF: Market Value x 40% tax = Php5,670,000 taxes for 7 containers
IF: 50% Discrepancies = Php2,835,000 tax collectibles
Whereas: Total Tax collected by BoC for the 7 containers = Php220,375.-
Hence, the BoC Sec.1-B failed to collect Php2,614,625 in taxes
FRESH GRAPES United States
1 box of grapes/10 bags = 15 kgs. ave. weight1 box of grapes = Php2,500 Market Value
40-footer container = 27,000 kgs. capacity
A total of 3 x 40 footer containers were imported in 1 month.
IF: 3 containers x 27,000 kgs./cont. = 81,000kgs. imported
IF: Weight 15 kgs./box = 5,400 boxes imported
IF: 5,400 boxes x Php2,500 MV = Php13,500,000 Market Value
IF: Market Value x 40% tax = Php5,400,000 taxes for 3 containers
IF: 50% Discrepancies = Php2,700,000 tax collectibles
Whereas: Total Tax collected by BoC for the 3 containers = Php124,087.-
Hence, the BoC Sec.1-B failed to collect Php2,575,319 in taxes
Fresh Pears China1 box of pears = 20 kgs. ave. weight
1 box of pears = Php1 ,000 Market Value
40-footer container = 27,000 kgs. capacity
A total of 6 x 40 footer containers were imported in 1 month.
IF : 6 containers x 27,000 kgs./cont. = 162,000 kgs. imported
IF: Weight 20kgs./box = 8,100 boxes imported
IF: 8,100 boxes x Php1,000 MV = Php8,100,000 Market Value
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IF: Market Value x 40% tax = Php3,240,000 taxes for 6 containers
IF: 50% Discrepancies = Php1,620,000 tax collectibles
Whereas: Total Tax collected by BoC for the 6 containers = Php61,840
Hence, the BoC Sec.1-B failed to collect Php1,558,160 in taxes
Conclusion : The Bureau of Customs failed to collect a total of Php
9,825,336 in duties & taxes. While the shipments from China are covered byACFTA, those from the US, Argentina & Chile should have been properlytaxed.
Assumption: If the importation of fruits should occur 4 times a year, tocoincide with high frequency consumptions, then it would be safe to assumethat : Php9,825,336 of tax deficits x 4 frequencies per annum = Php39,301,344tax collection deficit of the BoC on importations of fresh apples, oranges,
grapes & pears. Applicable to the 22 importations only.
Limitations: The research study does not cover the general imports of fruits ona national scale as the study covered only 22 actual importations within the onemonth period.