Press Release
January 8, 2008

MOVE OF CUSTOMS BUREAU TO LOWER COLLECTION GOAL QUESTIONED

Senate Minority Leader Aquilino "Nene" Q. Pimentel, Jr. (PDP-Laban) today questioned the move of Customs Commissioner Napoleon Morales to reduce the P254 billion collection target of the Bureau of Customs for fiscal year 2008 as it will affect the integrity of the P1.227 trillion national budget submitted by Malacañang and approved by Congress.

Morales appealed to Malacañang, finance and budget authorities for the downscaling of the BOC's collection goal in view of apprehensions that it will be difficult to attain due, among others, to the weak dollar which will reduce the value of imports on which customs duties are imposed.

"Allowing the BOC to reduce its 2008 collection target may affect the revenue basis of the general appropriations act that we in Congress used to debate and approve the measure," Pimentel said.

In seeking a downward revision of the collection target, the BOC head pointed out that the bureau fell short of its collection goal of P228 billion last year by P17 billion.

Instead of giving up this early on its collection target. Pimentel urged the BOC to intensify measures to boost its revenue yield, specially by stepping up the crackdown on smuggling and tax evasion.

"To allow the BOC's proposal would make a mockery of the proceedings of Congress. It would make the submissions done by the BOC and the Arroyo administration merely tentative proposals that they could revise after Congress had acted on them," he said.

"If at all, the BOC and the administration should have presented a more reasonable collection target to the House and the Senate when the BOC budget was discussed by the two chambers."

Furthermore, Pimentel said a substantial lowering of the BOC's collection goal without a corresponding reduction in the expenditure program will mean that the administration's objective of a zero budget deficit this year is no longer attainable.

He also criticized the continued footdragging of Malacañang, as well as the Department of Finance, BOC and the Bureau of Internal Revenue in implementing the lateral attrition program, which is meant to reward revenue and customs officials and employees who have met or exceeded their collection targets and to impose sanctions on those who will miss their targets.

The lateral attrition program was enacted by Congress in 2006 based on the assurance Malacañang that it will be an effective mechanism to enhance revenue collection.

Studied have shown that the government is losing from P200 billion to P300 billion a year from leakages in the tax system. But Pimentel said the government's efforts to plug the loopholes and raise tax collection efficiency leave much to be desired.

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