OFFICIALS of the Department of the Interior and Local Government (DILG) under the previous administration may face plunder charges for technical smuggling in connection with the alleged undervaluation of 469 fire trucks they imported from China last year.
The “highly questionable transactions” resulted in the government losing at least P78 million in duties and taxes with surcharge, or up to P411 million as penalty, equivalent to 60 percent of the landed cost, according to official documents furnished to the Inquirer.
The documents showed that the Bureau of Fire Protection (BFP) declared a value of only P760,000 for each of the 244 1,000-gallon fire trucks, and only P540,000 for each of the 225 500-gallon fire trucks it imported through the joint venture of Kolonwel Trading and Hubei Jiangnan Special Automobile Co. Ltd.
The declared valuations were grossly disproportionate to the contract price of P6,237,762 per 1,000-gallon fire truck and of P4,690,047 for each of the 500-gallon variant, the documents showed.
The BFP acted as consignee for the fire trucks, which started arriving at the Port of Manila, Manila International Container Port, and the Port of Batangas on June 20, 2015. The last shipment was made on March 16. All fire trucks had been delivered to the BFP as of March 18.
A certain Ramon D. Swing acted as broker of the shipments from Chinese fire truck manufacturers Hubei Jiangnan and Sonotruk Ongdao/Nerwin Industries.
Sources, who asked not to be identified for lack of authority to speak to the media, said Customs Commissioner Nicanor Faeldon was piqued because the deliberate inconsistencies between the declared valuations of the fire trucks and their contract prices had caused a substantial shortfall in revenue expected to be collected for the covered period of the transactions.
Had the fire trucks been properly declared and valued, the tax on shipment would amount to some P2.57 billion, the sources said.
But only P100 million in taxes were paid due to “underdeclaration and undervaluation,” they said.
Even adding duties and taxes, overhead cost, markups and other variable costs, the declared value of the fire trucks would not reach or go any closer to the contract amounts.
“President Duterte would want to go to the bottom of this shenanigan hatched and perpetrated by government officials during the last months of the Aquino administration,” the sources said.
The President and Faeldon have repeatedly announced that they would battle all forms of corruption in the bureaucracy.
“This is a clear case of one government instrumentality, the DILG, resorting to criminal undervaluation resulting in government losses of as much as P411 million. The President will not take this sitting down,’’ the sources said.
“How could we have expected the private sector during the last administration to toe the line and not resort to smuggling when as it turned out government agencies themselves were involved in smuggling?” they added.
The loss by the government of P77,993,963 was computed as a two-time surcharge if the undervaluation ranged from 10 percent to 30 percent, they said.
The percentage of discrepancy as declared vis-à-vis “as found” were 244 units multiplied by P194,102, or a total of P47,360,888 for the 1,000-gallon fire trucks, and 225 units times P136,147 per 500-gallon fire truck, or a total of P30,633,075.
The P47,360,888 and P30,633,075 add up to P77,993,963. But if the percentage of discrepancy in the declared values of the fire trucks as against their value as found would be more than 30 percent, the DILG would owe the Bureau of Customs (BOC) a penalty of 60 percent of the landed cost or a total of P411,300,955.
The P411,300,955 is broken down as follows: 244 units multiplied by P1,021,645 or a total of P249,281,380 for the 1,000-gallon fire trucks and 225 units times P720,087 or a total of P162,019,575 for the 500-gallon variants.
The underdeclaration, if found to be true, would make the DILG and BFP officials and the private sector firm they used criminally liable for smuggling, according to the sources.
The BOC personnel of record involved in the questioned transactions were examiners Eddie L. Colico, Anthony I. Carreon, Marie Dianne Bernadine M. Boongaling, Maricel Manguiat, Rita S. Jacinto, Nenita D. Delos Reyes, Noralyn T. Asaria and Renz D. Mangubat.
The BOC appraisers were Recaflor Edward F. De Leon, Evelyn R. Rivera, Melissa C. Aguila, Donnie T. Baldevieso, Ruel C. Gotico and Benjamin Manalo Jr. The contract was signed and consummated during the term of then Interior Secretary Mar Roxas.
BOC examiners and appraisers could be held liable under Sections 1403 and 707 of the Customs Modernization and Tariff Act.
Faeldon has recommended that the matter be referred to the Department of Justice, through the National Bureau of Investigation, for a deeper probe, the sources said.