THE Department of Finance (DOF) has ordered Bureau of Customs (BOC) to tighten its watch on pork importers trying to misdeclare or misclassify shipments to avoid correct payment of tariffs as the country reels from a pork supply shortfall that resulted in the spike in pork prices.
Finance Secretary Carlos G. Dominguez III issued the order after President Duterte approved in principle during the February 3 Cabinet meeting the Department of Agriculture’s recommendation to expand the minimum access volume (MAV) allocation for pork imports.
“Please take a close look at the potential smuggling of pork,” Dominguez told Customs Commissioner Rey Leonardo Guerrero during a recent DOF Executive Committee (Execom) meeting.
“Some pork importers may resort to technical smuggling,” Dominguez added.
Misdeclaration refers to a false, untruthful, erroneous or inaccurate declaration as to quantity, quality, description, weight, or measurement of goods resulting in deficiency between the duty and tax that should have been paid and the duty and tax actually paid.
On the other hand, misclassification means the use of insufficient or wrong description of goods or the use of erroneous tariff heading and sub-heading resulting in deficiency in duty and taxes that should have been paid versus the amount that was actually paid.
Dominguez, who served as agriculture secretary during the former Corazon Aquino administration, warned that traders may misclassify pork imports once the new MAV allocations and tariff rates are approved by the President.
The Tariff Commission has already submitted its recommendation on increasing the MAV to the President, according to the DA.
Aimed at boosting pork imports, the DA said the expansion of the MAV will help offset soaring pork prices amid the outbreak of the African swine fever (ASF) in the country, which has significantly reduced the pork output of local producers and jacked up market prices.
The current tariff on pork within the MAV is at 30 percent, while off-quota imports are taxed a higher 40 percent. The Tariff Commission has recommended a lower tariff rate on pork imports within the MAV, which should come from ASF-free countries.
Edible offal (entrails) of bovine animals, such as swine, sheep and goats are taxed much lower, which some importers may declare as prime pork shipments to avoid paying higher import duties.
For his part, Guerrero assured Dominguez that the BOC has been closely monitoring the imports of meat products, including pork and chicken.
The BOC is a member of the new economic intelligence task group that President Duterte created recently to go after smugglers, profiteers and hoarders of agricultural products.
Co-chaired by the DA and the Department of Trade and Industry (DTI), this group is also composed of the Philippine Competition Commission (PCC), Departments of Justice (DOJ) and of the Interior and Local Government (DILG), Philippine National Police (PNP), National Security Council (NSC) and the National Intelligence Coordinating Agency (NICA).
The President also issued Executive Order (EO) No. 124 imposing a temporary 60-day price ceiling on pork and chicken products in the National Capital Region (NCR) to help reverse soaring meat prices in the market.
Under EO 124, a price ceiling of P270 per kilogram (kg) for kasim/pigue, P300/kg for liempo, and P160/kg for dressed chicken was implemented starting this month in Metro Manila.