PRESIDENT Macapagal-Arroyo has ordered the Bureau of Internal Revenue to shut down and attach the bank accounts of tax-delinquent auctioneers of secondhand, imported vehicles in the Subic Bay Freeport Zone.
"I have instructed the BIR to use all powers in its command to run after these unscrupulous auctioneers, including the power to garnish bank accounts and close down establishments once assessment of the unfulfilled tax obligations is final,'' the President said in a statement.
The President issued the order after a final assessment by the BIR had found that the government had lost P944 million in forgone revenues from the top three car auctioneers at Subic.
"This is really a good start for the BIR and Commissioner [Guillermo] Parayno, and I assure him of my full support,'' Ms Arroyo said.
The BIR has already issued warrants of garnishment on the bank accounts of four Subic auctioneers under the National Internal Revenue Code (NIRC) to satisfy the government's claim to unpaid taxes, particularly the 10 percent value-added tax (VAT) on sales. A garnishment is a warning to a third party, in this case the banks, to hold, subject to a court's direction, money or property belonging to a debtor who is being sued by a creditor.
The President also ordered the justice department to assist the BIR in the ensuing legal battle after some of the Subic auctioneers questioned the BIR's move in court. The auctioneers claimed that part of Subic Freeport's tax incentives was the 5 percent gross income tax to cover all tax dues of locators in the free port.
This is the President's first major directive aimed at addressing the the long-standing complaint of domestic car manufacturers against the entry of used, converted and imported vehicles into Subic. Ms Arroyo had promised to put a stop to the practice that has significantly eaten into the sales of Japanese and US assemblers in the country.
The issue was again raised by representatives of the the US-Asean Business Council when they met with the President last Wednesday.
Testimony at a Senate hearing this week suggested that Subic may have become a center for car smuggling.
Customs Commissioner George Jereos said right-hand-drive vehicles were illegally entering the free port with approval from Subic Bay Metropolitan Authority officials.
Sen. Richard Gordon, a former SBMA chair, said as many as 9,000 cars had entered the country illegally through the SBMA "in the past so many years."
At a press conference in the Senate yesterday, Gordon blamed prominent local and national officials in the "rampant smuggling" of right-hand-drive vehicles into Subic.
Gordon said that although the Department of Trade and Industry had declared that such importation was illegal under Republic Act 8506, SBMA chair Felicito Payumo continued to allow it.
In a telephone interview yesterday, Payumo belied Gordon's claim that he was behind the car smuggling in the free port.
"I don't know what he's talking about. There are no violations of law covering the importation conversion and selling of second hand vehicles inside the free port zone," Payumo said.
He said that during Gordon's term as SBMA chair, uncollected duties and taxes amounted to P335 million.
"The issue of conversion of right-hand drive vehicles had been discussed during the 12th Congress. It was impossible that during Gordon's term there had been no importation of brand new vehicles at all," he said.
"How can there be smuggling when importers of secondhand vehicles are paying duties and taxes?" he added.
In his testimony earlier this week, Jereos said the "smuggling" of mostly right-hand-drive vehicles through SBMA was being facilitated by importation permits.
He agreed that SBMA officials were responsible for the proliferation of right-hand-drive cars in the free port.
Gordon said the importers in collusion with SBMA officials justify the importation by allowing the conversion of the cars into left-hand-drive before they are taken out of the free port. After conversion, the cars are not registered or taxed accordingly and are then auctioned off per shipment or by lot.
The average registration fee for a converted car is only about P2,000 each, regardless of whether it is luxury car or sports utility vehicle.
Gordon said that the importers also pay bribes to evade proper payment of taxes: P25,000 to the Land Transportation officials (in Olongapo and Subic), P25,000 for Bureau of Internal Revenue, and P50,000 to SBMA
"I have instructed the BIR to use all powers in its command to run after these unscrupulous auctioneers, including the power to garnish bank accounts and close down establishments once assessment of the unfulfilled tax obligations is final,'' the President said in a statement.
The President issued the order after a final assessment by the BIR had found that the government had lost P944 million in forgone revenues from the top three car auctioneers at Subic.
"This is really a good start for the BIR and Commissioner [Guillermo] Parayno, and I assure him of my full support,'' Ms Arroyo said.
The BIR has already issued warrants of garnishment on the bank accounts of four Subic auctioneers under the National Internal Revenue Code (NIRC) to satisfy the government's claim to unpaid taxes, particularly the 10 percent value-added tax (VAT) on sales. A garnishment is a warning to a third party, in this case the banks, to hold, subject to a court's direction, money or property belonging to a debtor who is being sued by a creditor.
The President also ordered the justice department to assist the BIR in the ensuing legal battle after some of the Subic auctioneers questioned the BIR's move in court. The auctioneers claimed that part of Subic Freeport's tax incentives was the 5 percent gross income tax to cover all tax dues of locators in the free port.
This is the President's first major directive aimed at addressing the the long-standing complaint of domestic car manufacturers against the entry of used, converted and imported vehicles into Subic. Ms Arroyo had promised to put a stop to the practice that has significantly eaten into the sales of Japanese and US assemblers in the country.
The issue was again raised by representatives of the the US-Asean Business Council when they met with the President last Wednesday.
Testimony at a Senate hearing this week suggested that Subic may have become a center for car smuggling.
Customs Commissioner George Jereos said right-hand-drive vehicles were illegally entering the free port with approval from Subic Bay Metropolitan Authority officials.
Sen. Richard Gordon, a former SBMA chair, said as many as 9,000 cars had entered the country illegally through the SBMA "in the past so many years."
At a press conference in the Senate yesterday, Gordon blamed prominent local and national officials in the "rampant smuggling" of right-hand-drive vehicles into Subic.
Gordon said that although the Department of Trade and Industry had declared that such importation was illegal under Republic Act 8506, SBMA chair Felicito Payumo continued to allow it.
In a telephone interview yesterday, Payumo belied Gordon's claim that he was behind the car smuggling in the free port.
"I don't know what he's talking about. There are no violations of law covering the importation conversion and selling of second hand vehicles inside the free port zone," Payumo said.
He said that during Gordon's term as SBMA chair, uncollected duties and taxes amounted to P335 million.
"The issue of conversion of right-hand drive vehicles had been discussed during the 12th Congress. It was impossible that during Gordon's term there had been no importation of brand new vehicles at all," he said.
"How can there be smuggling when importers of secondhand vehicles are paying duties and taxes?" he added.
In his testimony earlier this week, Jereos said the "smuggling" of mostly right-hand-drive vehicles through SBMA was being facilitated by importation permits.
He agreed that SBMA officials were responsible for the proliferation of right-hand-drive cars in the free port.
Gordon said the importers in collusion with SBMA officials justify the importation by allowing the conversion of the cars into left-hand-drive before they are taken out of the free port. After conversion, the cars are not registered or taxed accordingly and are then auctioned off per shipment or by lot.
The average registration fee for a converted car is only about P2,000 each, regardless of whether it is luxury car or sports utility vehicle.
Gordon said that the importers also pay bribes to evade proper payment of taxes: P25,000 to the Land Transportation officials (in Olongapo and Subic), P25,000 for Bureau of Internal Revenue, and P50,000 to SBMA
No comments:
Post a Comment