In August 2015, the Cebu Chamber of Commerce and Industry (CCCI) together with the Financial Executives Institute of Cebu, Inc. (FINEX Cebu), the Confederation of Philippine Exporters Foundation (Cebu), Inc. (PHILEXPORT Cebu), and the Philippine Institute of Certified Public Accountants -- Cebu Chapter (PICPA -- Cebu) submitted a position paper to the Department of Finance (DoF) requesting amendments to the Bureau of Internal Revenue Importer Clearance Certificate (BIR-ICC) and BIR Customs Broker Clearance Certificate (BIR-BCC) requirements in relation to the accreditation of the importer and customs broker, respectively. To date, the petitioners have not received feedback from the DoF. Hence, I reprint below the significant parts of the position paper.
In 2014, the DOF issued Department Order No. 12-2014 requiring all importers and customs brokers to secure the BIR-ICC and BIR-BCC, respectively. In this connection, the BIR issued Revenue Memorandum Order (RMO) No. 10-2014 to stipulate all the documentary requirements and procedures in the accreditation of importers and customs brokers. The BIR subsequently issued RMO No. 22-2014, RMO No. 33-2014, RMO No. 1-2015, and Revenue Memorandum Circular (RMC) No. 4-2015 as supplemental guidelines, clarifications, and amendments of the policies, guidelines and procedures as originally provided under RMO No. 10-2014.
FAST FACTS OF THE REQUIREMENTS AND PROCEDURES
- All applications for accreditations shall be filed directly and by personal appearance to the Accounts Receivable Monitoring Division (ARMD) of the BIR National Office in Quezon City.
- All importers and brokers were originally required to submit a minimum of twelve (12) supporting documents.
- Individual and non-individual applicants are required to submit two (2) additional documents and six (6) additional documents, respectively.
- In 2015, the BIR removed two (2) documents from the requirements but added six (6) additional certifications to be obtained from various divisions of the BIR.
- In effect, corporate applicants are required to submit around twenty-two (22) supporting documents in order to get the BIR-ICC.
- Most of these twenty-two (22) supporting documents are required to be certified, hence, must be obtained from various government agencies to secure the certified copies.
- Companies registered with the Philippine Economic Zone Authority (PEZA) are no longer required to secure the BIR-ICC.
IMPLICATIONS TO BUSINESSES OUTSIDE METRO MANILA
- Traveling to Manila for the sole reason of filing the application for accreditation and the requirement of a personal appearance is very costly and a huge burden to businesses, particularly for those that are Micro, Small and Medium Enterprises (MSME’s) located outside Metro Manila. This is one of the most unfriendly requirements to investors.
- Obtaining the required twenty two (22) supporting documents for corporate applicants would demand additional time and money, since these must be secured from various government agencies. The long list of required documents is burdensome and time-consuming, causing more delay in the accreditation of businesses. Without the required accreditation, there can be no importation. And without importation, there can be no more business. Ergo, without business, there can be no more income to be taxed by the government. In effect, the entire country suffers.
APPEAL TO THE GOVERNMENT
We do support the thrust of President Aquino for “Tuwid na Daan” and also the effort of the government to stop all forms of smuggling. We believe in improving our competitiveness by making it easy to do business in the Philippines. In aligning with those objectives, we recommend the following:
- Allow the Regional Offices of the BIR to accept and process the BIR-ICC and BIR-BCC applications of taxpayers within their jurisdiction to make it more efficient and less burdensome for the importers. The required personal appearance of the responsible ranking officer disrupts the daily business operations which are the primary concern of any company. Personal appearance may also be done in the Regional Offices. The BIR National Office can empower its Regional Offices by entrusting this function to them. The procedures should be friendly to investors and not be based solely on the convenience of the BIR.
- Simplify the procedures to make it easier for the taxpayers to comply by reducing the list of requirements to expedite the processing time. For example, the required six (6) certifications from various BIR divisions can be limited to one certification, when the computerized records of the BIR are fully integrated. If the BIR’s computerized system is linked to various government agencies, the verification process can easily become automated, thus eliminating the need to delegate such verification process to the importer/taxpayer.
- Finally, we propose that before implementing a new policy, a thorough consultation process be done with the stakeholders on the implications of such policy to businesses particularly taxpayers outside Metro Manila. This approach would exemplify that the “Tuwid na Daan” is a joint effort of policy makers and constituents in the country.
The concerns above are simple yet very important to the legitimate importers and brokers from Visayas and Mindanao. Likewise, it is also important for the government to encourage the legitimate importers and brokers to continue their business by accrediting them to minimize the proliferation of smugglers. The presence of complicated and burdensome requirements is not the best solution to curb smuggling. But the presence of a simple, clear and friendly set of regulations would encourage more taxpayers to comply. I hope the unheard voices of the importers from VisMin are heard and acted upon soon.
Wendell D. Ganhinhin is a tax and outsourcing partner at the Cebu and Davao Branches of Punongbayan & Araullo.