Is your car running on smuggled gas?

MANILA, Philippines – Smuggling cases slapped against importers as well as raps against tax cheats have been part of the regular news cycle.  But when Angelito Alvarez announced today, Sept. 8, that an oil importer was the latest in its growing list, two things come to mind: Alvarez is indeed leaving the Bureau of Customs soon and oil is the mother of all smuggled products in the country.

In a couple of days, Alvarez is set to resign as Customs chief. His likely replacement is former Muntinlupa Rep. Ruffy Biazon, though the Palace has yet to formally name him.

Despite President Aquino’s public statements that he was not satisfied with Alvarez’s performance, the outgoing customs chief seemed set to nail one more alleged wrongdoer.

That is Jetti Petroleum Incorporated, a locally owned small oil player that has expanded its retailing business from Luzon to Mindanao since 2004.

Jetti’s key executives, brokers, and lawyer were slapped with a technical smuggling case by the Bureau of Customs at the justice department, which would then determine if the case could be pursued in court.

Alvarez said Jetti failed to declare some of its petroleum imports on time, in effect dodging customs control measures at the international port terminal near Cagayan de Oro City. The case covered Jetti’s importations over a 15-month period from September 2010. 

For 15 of the 49 import entries during that period, the shipped-in petroleum products were discharged despite lack of proper documentation. Alvarez said that after 30 days, those shipments, which should have earned the government P4.1 billion in customs duties, should have been considered abandoned in favor of the government.

Oil smuggling has been rampant in the Philippines, no thanks to the country’s porous borders.

Uncollected customs duties from smuggled oil alarmed even the International Monetary Fund some years ago since it reduced the gross domestic product, a measure of the size of the local economy, by about 0.3%. 

The economic team led by Finance Secretary Cesar Purisima has been focused on the wholesale inward smuggling of oil products, as well as tax evaders, to shore up revenues and reduce the widening fiscal gap.

When the Aquino administration took over in June 2010, Purisima harped on these “low-lying fruits” that he thinks the government should prioritize before even considering raising tax rates.

Hopefully the new man in customs will keep on picking those fruits. Move.PH