MANILA, Philippines — The Philippines has lost at least P161.5 billion in tax revenue from imports from the country’s big trading partners due to leakages in 2017, Senator Panfilo Lacson revealed Tuesday.
During the Senate deliberation on the proposed 2020 budget of the Department of Finance (DOF), Lacson presented “interesting revelations” on leakages concerning imports.
Citing figures from World Bank’s World Integrated Trade Solution, Lacson said that the Philippines lost P10.7 billion in tax revenue from products imported by South Korea.
Lacson noted that South Korea’s reported importation to the Philippines in 2017 amounted to US$10.5 billion but the Philippines only reported US$8.8 billion in imports from South Korea.
“So meron kang difference or discrepancy na US$1.7 billion or P89 billion times 12 percent VAT (value added tax), nawalan na naman tayo ng 10.7 billion,” Lacson.
(So you have a difference or discrepancy of US$1.7 billion or P89 billion times 12 percent VAT, we lost 10.7 billion).
Lacson further noted that the Philippines suffered a revenue loss of P4.757 billion from the import of products from Hong Kong.
Meanwhile, the Philippines lost P857 million pesos from the importation from the US, he said.
The senator presented anew the amount of tax revenue the Philippines lost from the import of Chinese products which amounted to over P82 billion. He earlier raised this figure during a Senate finance committee hearing last August.
READ: Lacson says P82 billion lost in tax revenue from Chinese imports in 2017
The senator then cited a statement made by Finance Undersecretary Karl Kendrick Chua during that hearing in August where he said that the Philippines lost an estimated P63 billion.
This as Chua expressed concern that the Philippines may be losing millions in tax revenue due to the more than 500 ecozones across the country.
“To sum it all up…wala pa yung sa Middle East, wala pa yung ibang country, ito lang yung mga big trading partners natin, ang revenue loss natin o leakage—and this involves tax administration—P161.5 billion,” Lacson pointed out.
(To sum it all up…we haven’t even gone through figures from the Middle East and other countries, this is just from our big trading partners, our revenue loss or leakage—and this involves tax administration—P161.5 billion).
Lacson then asked Senator Sonny Angara, Senate finance committee chair, what efforts the government is taking to plug such leakages.
“According to the Secretary of Finance, they’re trying their best to…I think there’s been some increase in administrative efficiency,” Angara said.
He then explained that the discrepancy between the declarations of importations, at least for China, was because China declares even goods for transshipment as exports.
“Meaning if the goods are sent to the Philippines but bound for Australia for instance, they are still declared as an export whereas we don’t declare if it’s just passing through as transshipment, it’s not declared as an import on our end,” Angara added. /jpv