There is something regrettable in the government’s decision to destroy all those luxury vehicles seized by the Bureau of Customs for lack of proper documents or failure to pay the correct import taxes.
President Duterte had lamented that the original smugglers of seized vehicles end up getting them at lower prices during government auctions.
Hence, the reasoning went, just destroy them.
Last month at the Bureau of Customs in Manila, he witnessed road rollers crushing 20 high-end vehicles worth at least P61 million, including those bearing such brands as Lexus, BMW, Mercedes-Benz, Audi, Jaguar and Corvette.
Ten other luxury vehicles believed smuggled into the country were also destroyed simultaneously in the ports of Cebu and Davao.
The President had said that the destruction of the smuggled luxury vehicles was intended for the benefit of wealthy car enthusiasts who do not pay correct import duties, as well as to unscrupulous traders who use their connections to smuggle expensive vehicles and sell these locally for a handsome profit—at the expense of the government.
Expectedly, following the President’s lead, Customs Commissioner Isidro Lapeña said his agency would destroy smuggled luxury cars instead of putting them up for auction.
On the surface this is good PR, showing political will to send a strong message to smugglers. Past experience has indeed shown how those who tried to avoid paying the correct taxes ended up getting back their smuggled vehicles at government auctions.
It had gotten to the point that other parties were emboldened to smuggle or misdeclare their imports, knowing that they could get hold of these even under the worst case that they are caught—during public auctions of seized customs goods.
But there is an alternative action that the government can consider: the reexport of seized vehicles, with the proceeds going to government coffers.
This is not a new concept; past administrations had done it. And the amount involved in those seized luxury vehicles that the Duterte administration could convert to cash is nothing to sneeze at.
In Sta. Ana, Cagayan, at least 30 Hummers are scheduled to be wrecked in the ongoing drive of Cagayan Economic Zone Authority (Ceza) to destroy more than 800 vehicles smuggled through Port Irene. Ceza Administrator Raul Lambino told reporters that the Hummer units would comprise the second batch of high-end vehicles to be condemned.
Earlier, on March 14, the President led the destruction of 14 luxury cars including a Porsche 911, a Maserati Quattro, a Mercedes-Benz E55, a BMW Alpina B12, a Mercedes-Benz Jeep G320 and a Mercedes-Benz SL55.
According to Ceza, there are still 841 vehicles impounded on a 5-hectare lot in Barangay Casambalangan in Cagayan. Among these vehicles are a Lamborghini Gallardo, Porsche 911s and Cayennes, Hummers and Mercedes-Benzes and BMWs, not to mention Harley Davidson motorcycles.
Imagine the cost of all those luxury vehicles, which the government can convert into revenues. At a conservative price of P1 million each, that’s easily P841 million in new revenues if the government reexports them, or P420.5 million if sold at just half that conservative price.
The money can be used to augment funds earmarked for the poorest families affected by the recent tax reforms that raised the prices of basic commodities and services, or some other social program of the government that can help the poor.
Destroying the smuggled vehicles before the media cameras is good publicity. But it achieves not much else, except perhaps the production of a pile of metal junk after the show.
On the other hand, the reexport of the luxury vehicles is a win-win solution: The smugglers don’t end up getting them again, and the government generates incremental income. It goes without saying, however, that this should be done in an ultra-transparent manner, and the government must ensure that no scoundrel will be smuggling those beauties out of the impounding area.