Ministry yet to collect $2 million in customs fees

By Joyetter Feagaimaali’i-Luamanu 19 August 2018, 12:00AM

A total of $2.66 million in unpaid customs declarations is owed to the Ministry of Revenue (M.O.R.). 

This was revealed by the Auditor’s Report for the period November 1, 2013 to March 31, 2014. The audit report says there was no documented evidence to confirm the approval for the release of goods without the payment of duty to custom officers. 

“Any duty owing should be paid before the release and removal of goods." 

However, in certain cases, customs officers may release goods in advance of the full payment of duty owing. 

“This exception is largely intended for release in advance of payment of perishable goods (medical supplies, pharmaceuticals, frozen goods etc.) or to facilitate certain activities (government projects, aid agencies, relief of natural disasters etc.)." 

“Audit noted that there was no documented evidence of the customs officers’ approval of the pre-release. M.O.R. acknowledged that there was a need to facilitate release of certain goods perishable in nature (medicaments, pharmaceuticals, frozen goods) as well as facilitation for the purpose of import (government projects, aid agencies, relief of natural disasters),” stated the audit report. 

According to the report, the M.O.R. emphasised that approval of pre-releases can only be given by the Chief Executive Officer at the time and in exceptional circumstances, an Assistant Chief Executive Officer level officer. All pre-releases are recorded and filed in the pre-release file. 

But the M.O.R., in response, said that the Auditor contact the technical operational management for these requests.

“Audit noted that dutiable goods such as car parts, clothing, and building materials (most nonperishable and not subject to preservation needs) were captured in unpaid declarations." 

“As such it is difficult to verify the validity of the release of such goods. M.O.R. responded that goods may be released prior to payment of full duties only if a pre-release application is approved." 

“Pre-releases are also done for some projects under incentives provided by government. These approvals have specified timeframes within which such items are to be imported." 

“Given the timelines, pre-releases for these projects are sometimes approved to facilitate start-up operations where the Ministry of Commerce, Industry & Labour (M.C.I.L.) is required to sight and approve the entries, and the post compliance to be done by both M.C.I.L. and M.O.R." 

“Regarding this issue, M.O.R. is continually enforcing measures to ensure strict compliance with our governing laws and approved standard operating procedures.” 

The Audit report indicates that $2,660,382.20 in unpaid declarations was from Ministries and S.O.E's while the others were owed by various companies. 

The audit report expressed concern at the practice of repeatedly authorizing the release of dutiable goods without payments of duty, when most were not perishable. 

However, the M.O.R. in response said that it is actively monitoring and pursuing recovery actions for unpaid debts as well as deferral and dishonoured cheques. 

“It was also continuously reviewing its debt recovery plan in order to improve on debt recovery work despite a serious shortage of manpower to effectively review and follow up all the unpaid outstanding on a timely basis."

“Audit raised the issue that the Customs Division should play a bigger role at freight stations. 

As a result, the inappropriate authorization of release of dutiable goods occurred at freight stations.  

“Audit concern is that M.O.R. is aware of this practice. The M.O.R. said this issue was currently being dealt with at the management level for goods identified as released in 2013.”

By Joyetter Feagaimaali’i-Luamanu 19 August 2018, 12:00AM

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