'TARA' IS GREASE MONEY

By Chito Junia

EVERY TIME a leadership change happens at the Bureau of Customs (BOC), the “no tara” policy is always among the first batch of orders issued by the new commissioner. And yet, the bureau continues to fail in meeting its collection targets. But what is “tara” and how damaging could this practice be, that this BOC stigma puts the bureau as among the most corrupt agencies of the government. 

“Tara” is a fixed amount of money pegged by some corrupt customs officials on certain inbound container vans loaded with imported goods to facilitate its fast and trouble-free release at the BOC. 

In short, “tara” is grease money. It is a fixed amount that is added to the duties and taxes of imported goods to make some corrupt customs officials look the other way, every time an entry of misdeclared, undervalued or underdeclared shipment goes through their office. 

 

‘Tara’ Divided

The “tara” system may have been designed by some corrupt customs officials, unscrupulous customs brokers, and players (smugglers) to facilitate smuggling. A player can be an importer himself/herself, or a facilitator at the BOC. And depending on the size of the container van and declarations of the shipment such as the items, classification, value, weight and freight cost among others, the customs official shall determine the dutiable value of the importation. 

Thus, if the dutiable value of a container van of general merchandise, for instance, is US$100,000 and its amount of tax to be paid in peso value is P100,000, the customs official would allegedly allow an undervaluation in the value of the shipment to lower its tax to only P 40,000, provided that the unscrupulous broker or player shall pay the “tara” of, say,  P30,000 or even more.

That should save the unscrupulous broker or player P30,000 from its real taxable amount of P100,000 as he/she would only have to shell out P70,000 at the BOC, instead of its real taxable amount. This would result in revenue loss of P60,000 for the government.

The “tara” is then divided among all those involved in the transaction.  

While the unscrupulous broker or player for his/her part will charge the real importer or consignee of the goods, maybe P 150,000 or more, for his/her services in facilitating the release of the shipment at BOC. That leaves this broker or player, after all other expenses, some P20,000 or more per container van.  

 

Benchmarking

The “no tara” policy is supposed to address the problem of corruption in the Bureau of Customs and raise revenues for the government. It should also lower the cost of importation, if properly handled.

However, the bureau’s continued failure to meet its collection targets is an indication that the policy needs further strengthening.

There is such a thing as “benchmarking” in the Customs bureau, Benchmarking, which has been the “kalakaran” (usual practice) in the BOC for some time, is illegal per se. It is a system by which a specific amount of tax is pegged on a shipment based on the size of a   container van and declarations among others, without necessarily verifying the real values of the imported items contained in the van. It is like a pre-determined taxable amount on importations based on container van size and declarations, which are usually taken at face value. 

The problem with the system is that every time the benchmark is increased to raise revenue collections, the added amount is allegedly passed on to importers/consignees by unscrupulous brokers and players. Supposedly, the big gainers every time the benchmark is raised and the “no tara’ policy is strictly enforced are the government and importers. But since the added tax to cover the real dutiable value of importation is passed on to importers or consignees raising the cost of importation, without affecting the “tara” allocation, the consumers ultimately carry the burden of the country’s high cost of importation. 

While the pockets of some corrupt customs officials continue to be lined with ”tara”, although at a lesser extent, making the unscrupulous brokers and players the biggest gainers.

 

Lapeña, The Game Changer

The recent appointment of former Philippine Drug Enforcement Agency (PDEA) Chief, retired general Isidro Lapeña to head the BOC has added fresh hope to the beleaguered 

Agency.  And like his predecessors, Lapeña has not only ordered a no “tara” policy, but has complemented it with a “one-strike” policy as well. The latter is expected to deter customs officials from doing illegal transactions, if only to enable them to meet their collection targets.  

And to deliver a strong message to all customs officials that he means business in making them meet their collection targets, Lapeña relieved the district collector of the Manila International Container Port (MICP) and the Port of Manila (POM) for failing to meet their collection targets. According to Lapeña, the bureau’s cleansing will be a sustained program under his watch. 

Lapeña’s “one-strike policy” could be the game changer, if seriously enforced. But the commissioner can also strengthen his “no tara” policy if he can establish a strong coordination system between the BOC and customs stakeholders, not the consignees for hire, that would indicate the real values of imported goods based on their classification and their corresponding duties and taxes. 

 

Where Tax Is Due

Supposedly, without the “tara”, the cost of importation should go down. 

But customs stakeholders should know this information so that they won’t be duped by unscrupulous brokers and players into paying more than what should only be paid to the government as the rightful tax for their importations, provided also that, the Commissioner can assure the stakeholders of fast and trouble-free release of properly documented and appropriately taxed shipment at the BOC.

Should this coordination system between BOC and customs stakeholders (importers) be established and the one-strike policy strictly enforced, perhaps the much awaited real reforms in the Bureau of Customs can happen under Commissioner Lapeña’s watch.

 

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