Press Release
September 29, 2015


Senator Sonny Angara on Monday has sponsored the Customs Modernization and Tariff Act (CMTA) which seeks to simplify, modernize and align the country's customs procedures with global best practices.

The 157-page proposed measure, which languished in Congress for almost a decade, aims to amend and update the Tariff and Customs Code of the Philippines in compliance with the Revised Kyoto Convention, a blueprint for modern and efficient customs procedures of the World Customs Organization, to which the Philippines is a signatory since 2010.

"Mas mapapabilis at iigting ang transparency sa mga proseso ng Customs. At lalong maeengayo ang mundo na makipag-kalakalan sa atin. Ang pag-modernisa ng Customs ay magdudulot ng pagtibay ng ating global competitiveness," said Angara, chairman of the ways and means committee, in his sponsorship speech.

The senator cited a 2014 study by the Global Financial Integrity which shows that from 1960 to 2011, the government lost approximately $277 billion in revenues due to technical smuggling.

"We want to overhaul and modernize the bureau which has long been perceived as one of the most corrupt and underperforming government agencies in the country. The measure also reinforces BOC functions towards simplified, secured and harmonized trade facilitation apart from being a revenue-generating agency," Angara said.

The CMTA, which has gained support from the Joint Foreign Chambers, simplifies and clarifies customs procedures including import clearances and valuations, making the release of goods much faster, regardless of whether you are an individual entrepreneur or a large multinational.

The bill mandates the use of information and communications technology and other appropriate applications that speed up the inner-workings of Customs, but also make it more transparent.

"We aim to ingrain transparency and accountability into the BOC. For instance, District Officers and front-liner employees will be prevented from holding the same position in the same district for more than three years. Higher penalties and punishments will also be prescribed as a further deterrent to smuggling," the lawmaker explained.

The measure also clearly defines the exercise of customs police authority, customs jurisdiction and customs control by specifying the functions of BOC when it come to post entry audit and clarify the bureau's relations with the country's free zones.

According to BOC officials, once the Customs modernization bill is enacted, its revenue collection will improve by 10 percent.

"Kung ang koleksyon nila noong 2014 ay P369 billion, ang diumanong dagdag ay P36 to P37 billion. Malaki-laking ambag po ito sa kaban ng bayan. Marahil, kayang-kaya na ang maipasa ang hinihiling nating income tax reform," Angara said.

The CMTA further seeks to raise the tax-exempt value of balikbayan boxes from P10,000 to P150,000 and the de minimis value, which is the minimum cost of goods required to undergo Customs inspection, from P10 to P10,000, and to adjust the values for inflation every three years.

"Ang halagang nararapat exempted sa buwis para sa ating returning residents o OFWs ay hindi na po makatarungan. Dahil hindi pa nababago ang halagang ito, hindi na nasusunod ang polisiya at bukas tuloy ang pagkakataon para ito'y pagsamantalahan," he pointed out.

"Hindi man madali ang pagmomodernisa sa Customs, nararapat lang na tahakin ito. Sampung taon nang dinidebate ang panukala at bawat oras na pinapalipas, umiiral ang isang antigo't diumanong baluktot na sistema. Oras na para ituwid ito. Ipasa na po natin ang CMTA," Angara concluded.

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