Gordon: P26B lost to smuggling in Subic

Administration Sen. Richard Gordon on Saturday disclosed that over P26 billion in tax revenues during a three-year period were lost due to smuggling of second-hand imported vehicles, tobacco products and liquor inside the Subic Bay Metropolitan Authority (SBMA).

In an interview with ANC, Gordon ranted at what he described as President Arroyo's "transactional leadership," which he defined as staying in power through patronage politics.

Gordon, chairman of the Senate Committee on Government Corporations, said that he has documents to prove that the government lost billions of pesos in revenues because of the nondeclaration and underdeclaration of taxes of vehicles, tobacco products and liquor in the freeport zone.

He said from 2002 to present, around 90,000 second-hand right-hand drive (RHD) and luxury vehicles were brought into Subic with purchase prices of $500 each.

According to Gordon's calculations, the government should have earned P13.4 billion in taxes if the importers paid the proper duties for the undervalued vehicles.

For the same period also, Gordon said a total of 1.37 million cases of cigarettes arrived in SBMA for transhipment. Records, however, showed that only 4,503 cases were eventually shipped out of the port, the senator added.

He said that 1.369 million cases of cigarettes were missing. The missing shipment easily translates to tax losses of P9 billion, he said.

Gordon said that around 877,000 cases of liquor arrived in SBMA during the same period, also for transhipment. Only 56,000 cases were shipped out of the country.

He said 821,000 cases were missing, costing the government around P4.21 billion in tax losses.

He said that rampant smuggling has cost the government over P26 billion in tax revenues.

Gordon said the President should go after the smugglers in SBMA because failure to do so meant she was part of the illegal activity.

Cars for votes

On Friday, Gordon threatened to withdraw support from the administration if the President continues to lead a transactional leadership.

"I hope the President doesn't sign it because I am going to leave the President if she allows these cars to go over there," Gordon told reporters in an interview.

Gordon was referring to an alleged Malacañan recommendation allowing second-hand cars enter SBMA as concession to the Magsaysay family of Zambales for supporting President Arroyo during the impeachment crisis. The Magsaysays and the Gordons are political rivals in the province.

Malacañan denied Gordon's allegations.

Executive Secretary Eduardo Ermita said he knows nothing about Gordon's charges. Ermita said he does not recall seeing, much less signing, Executive Order (EO) 156.

Gordon said he criticized the President not because he was interested in the SBMA, where he was once the administrator. Reports said that the senator was lobbying for the appointment of protégé to a top post in the SBMA.

The senator said he has reason to believe that the Magsaysays, led by Zambales Governor Vicente Magsaysay, is behind the lobby to lift the import ban on second-hand RHD cars in Subic. The Magsaysays own the largest second-hand car dealership in Subic and Zambales.

Gordon said it makes sense that the Magsaysay family will seek Malacañan's approval to lift the import ban on second-hand vehicles because of their car business.

The plan is to rescind the executive order banning the importation of used cars in Subic to give way to the approval of a recommendation that would legalize the delivery of smuggled vehicles into the port, Gordon said.

Gordon said the recommendation to allow the entry of second-hand cars in the SBMA was the reason behind AVE party-list Rep. Eulogio Magsaysay's withdrawal of his signature in the impeachment complaint against the President. The Zambales governor is cousing of the party-list congressman.

The executive order prohibits the importation of all types of used motor vehicles, except under certain conditions, where the car is brought in by a returning Filipino from abroad or an immigrant.

Ermita said he will consult with the legal affairs division of Malacañan regarding the status of the EO signed in 2002.

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