Tuesday, April 25, 2006

Exporter tells customs chief to leave them out of brokers' law

WE DON'T mind if the Customs Brokers Act results in a more professional customs brokering but leave the exporters out of it.

This was the statement of Philippine Exporters Confederation Inc. (Philexport) president Sergio R. Ortiz-Luis Jr. in reaction to claims made by Customs Commissioner Napoleon Morales that the new law has helped the bureau increase its revenue collection this year.

The export leader said President Gloria Macapagal-Arroyo must have been misinformed by Morales because the new law has yet to be put into effect after most players in the import and export business opposed the way it is planned to be implemented.

Exports are revenue-neutral as the Philippines had long adopted a policy of not taxing exports, a common practice around the world.

Only two weeks ago when the law was supposed to be implemented, the Philexport signed a letter sent to President Gloria Macapagal-Arroyo asking the Chief Executive to stop the implementation of the law for violating provisions of its implementing rules and regulations exempting small and medium exporters as well as priority sectors determined by the Export Development Council (EDC) from employing brokers in signing their export documents.

The same opposition was expressed by the Port Users Coalition that includes not only importers and exporters but also over 200 customs brokerage companies and logistics and forwarding companies.

The export leaders also said in their letter to Arroyo that an administrative order issued by Morales early last month disregarded the provisions of the law's implementing rules and regulations (IRR) and gave licensed customs brokers the exclusive right to sign export and import transactions.

They said the new rules, if followed, will paralyze the automated export documentation system (AEDS) pioneered by the electronics industry in Southern Tagalog and Cebu and has been expanded to locators in Subic and Clark. AEDS is the first breakthrough in electronics processing of export documents in the country.

The new system was seen by the export leaders as another layer of red tape and an added cost to the processing of the export documents of small exporters done in the One-Stop Export processing centers operated by Philexport and its regional chapters across the country.

Most of all, Ortiz-Luis, said, a new provision in the changed rules imposes brokers fees equivalent to 1/16 of one percent of the value of imports or exports will be charged the international traders.

He estimated that the bonanza fees will redound to billions of pesos a year gained by the brokering profession out of the pockets of exporters and importers.

Pressed by government to raise export sales to US$50 billion this year, the exporters are beginning to murmur that targets may not be met as exporters, especially the small ones, are getting hit by a double whammy of a strong peso plus additional fees for brokering.

Until today, most small exporters sign and work for the processing of their own documents. When the new law takes full effect under the revised rules made by Morales, they will lose that right and instead have to pay brokers to sign for them. (Philexport News and Features)

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