Lawmaker to Consider Smuggling As Economic Sabotage

Any form of smuggling involving goods with an aggregate value of P1 million will be considered as an act of economic sabotage, this is what a lawmaker has proposed in the Tariff and Customs Code of the Philippines.

Nueva Ecija Rep. Estrellita Suansing, filed House Bill 5179 that seeks to amend Presidential Decree No. 1464 to deter smugglers by imposing steep fines on them. The proposed bill defines economic sabotage as “any and all activities that undermines, weakens or renders into disrepute the economic system or viability of the country or tends to bring about such effects and involves goods and/or articles with the aggregate value of P1 million.”

The measure is now pending before the House Ways and Means committee chaired by Marikina City Rep. Romero Quimbo.

The bill also seeks to amend Section 3601 of PD 1464 pertaining to unlawful importation, and Section 3602, referring to various fraudulent practices against customs revenue, so that any violation of these provisions will be constituted as economic sabotage.

The bill proposed that violators who engage in activities that sabotage the economy will be penalized with a fine equal to twice the fair market value of the articles involved, or a fine equal to the aggregate amount of the taxes, duties and other charges avoided.

It imposes a minimum jail time of eight years and one day up to life imprisonment, and the confiscation of the articles involved. If the violator happens to be a juridical entity, the penalty of imprisonment shall be imposed on the president and the officers responsible for the smuggling. In addition, the business permits and licenses of the business entity shall be revoked or canceled.

In a report, Suansing said stiffer penalties should be imposed on smugglers, considering the detrimental effect of smuggling on the economy, noting the losses the government has incurred for years due to smuggling.

Losses

The lawmaker, in a report over GMA News Online, cited a study by Global Financial Integrity (GFI) which highlighted that the Philippine government lost at least $19.3 billion in tax revenues since 1990 due to Customs duties evasion through import under-invoicing alone.

Report said that combined with an additional $3.7 billion in revenue losses through export under-invoicing, the government lost at least $23 billion due to trade misinvoicing since 1990.

The lawmaker said that aside from the revenue losses, smuggling constantly poses as a hindrance to the growth of domestic industries.

In the bill’s explanatory note, She said it fosters unfair competition with the local producers and manufacturers, including licensed distributors, wholesalers and retailers.

Report said the GFI’s report noted “the country lost to smuggling an estimated $3.85 billion in tax revenues in 2011. The lost income, it said, was more than double the size of the fiscal deficit and constituted 95 percent of the total government expenditures on social benefits during the same year.

In the 52-year period covered by the study, the Philippines lost $177 billion through capital flight, according to the report.

Source: GMA News Online