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Cebu City, Philippines - If the Bureau of Customs (BOC) insists on demanding for P38 million in import taxes before releasing the rice belonging to Reagan King, it should be the government that pays for it, the businessman’s legal counsel said Monday.
Lawyer Simplicion Jorgio said the BOC misapplied circular 23-008 of the National Food Authority (NFA), which stated that the benchmark price of rice was $740 per metric ton as of April 3.
The benchmark price is what the BOC uses to compute taxes for imported rice.
Jorgio, however, pointed out that the rice King bought and stored in a warehouse in Mandaue City was bought before the circular was issued, when the benchmark price of rice was still $237 per metric ton. This, Jorgio said, should be the basis for the computation of the shipment’s taxes, which King already paid.
If BOC insists on collecting the additional P38 million for King's rice, then they should collect from the Philippine International Trading Co. (PITC), a government-owned company, Jorgio said.
Jorgio pointed out that it was PITC, not King, that contracted the rice from a Vietnam-based supplier between October 2007 and April 2008, in behalf of a Philippine-based farmer’s cooperative.
King simply bought the rice from the farmer’s cooperative when the shipment was already in the country, the lawyer said.
“It was the government that bought the article from Vietnam,” Jorgio said.
While the 24,443 sacks of rice was stored in a warehouse prior to distribution to wholesalers, a joint team from the NFA and National Bureau of Investigation (NBI) raided it on April 2, believing the warehouse to have lacked NFA accreditation and the shipment the result of rice hoarding.
Shortly thereafter, senior NFA officials certified that the warehouse had the agency’s accreditation.
However, the botched operation caused delays in the shipment’s release, which costs the businessman P5,000 to P10,000 per day to pay the rent of the warehouse that contains the rice shipment and other expenses, said lawyer Gerry Carillo in an earlier interview.
BOC in Cebu demanded King pay taxes for the shipment, which the businessman said he did, amounting to P27 million. However, King said last week that the BOC head office in Manila was asking for another P38 million.
Jorgio said that he would submit a position paper to the BOC within the week outlining why King should not pay the P28 million.
King, in an earlier interview, said that if he were to pay that tax, he would be forced to sell the rice at P50 per kilogram to attempt to regain the costs. The market price for the same variety of rice is P18.25 per kilogram.
Meanwhile, Mandaue City Mayor Jonas Cortes on Monday formed a task force to inspect the compliance of businesses – including warehouse operations – with city permits.
The mayor stressed the need to inspect warehouses following a raid over the weekend that resulted in the discovery of 18 vehicles of Korean make that were suspected to have been smuggled.
The raid was a result of a surveillance on warehouses suspected to contain hoarded rice.
The mayor’s task force is composed of the City Treasurer, City Administrator, a representative from the police and a representative of the fire department.
Cortes said the task force would go around the city every now and then to check for business permits of different establishments.
Vice Mayor Carlo Fortuna shared the mayor’s sentiments, and pushed for the strengthening of the city's intelligence network by tapping barangay (village) officials to help monitor activities in warehouses.
He proposed that barangay tanods (village security officers) be trained by the city police to conduct surveillances.
Cortes also proposed setting up a communications center linking City Hall with barangay halls, the city police office and the fire department for quicker coordination.
Cortes lauded the Presidential Anti-Smuggling Group (PASG) for discovering the allegedly smuggled cars.
He said he did not mind that the PASG conducted the operation within Mandaue City without coordinating with city authorities.
“Di man ta manghambug nga kaya kung di gyud nato makaya (Let’s not brag that we can do it ourselves if in fact we can’t). They helped us,” the mayor said. /With Reporter Dale G. Israel
