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Cruise ship seized for tax dodging

Jun 09, 2009

Customs has seized a luxury ship from its owner who imported the vessel two years ago but did not pay P19.8 million in taxes on it, an official said yesterday.

The agency ordered the $1.8-million 7107 Islands Cruise forfeited after it denied its owner’s plea in September not to seize it, Finance Undersecretary Estela Sales said.

The ship, formerly named Coco Explorer 2, entered the Port of Batangas on Sept. 4, 2007, supposedly for repairs, but officials said it was actually brought in to be delivered to its owner, Esteban Tajanlangit.

Tajanlangit owns the Boracay Terraces Beach Resort and is a director of Asiana Villas, a company that owns land on Boracay Island. He is also a director of Boracay Property Holdings, the company that owns an 80-hectare estate where Shangri-La’s 180-room resort hotel is being built.

Tajanlangit has also been operating the 7107 Islands Cruise , which serves the Coron-Puerto Galera-Boracay route and is said to offer 137 rooms that can accommodate 400 guests “in five-star luxury.”

“For almost two years now the vessel ... [has been] operating as a cruise ship around Boracay, Coron, and Subic without a single centavo paid for customs duties,” Sales said.

She said the ship’s owner, 7107 Islands Shipping Corp., had tried to avoid paying duties on the ship by registering it with the Philippine Economic Zone Authority and the Subic Bay Metropolitan Authority.

The Zone Authority said it did not grant the owner an import permit for the ship, and that it registered with it only last September after the vessel had already been subject to forfeiture proceedings.

And Subic officials say they only exempt from taxes capital equipment and raw materials for use within the free port.

“Without a doubt, this fraudulent course of action is obviously adopted by the claimant as a scheme to camouflage its dubious intention to smuggle the vessel into the country to the prejudice of the government,” Customs Commissioner Napoleon Morales said.

Customs seized the ship on May 30, a Friday, just as its passengers and crew were having a party.

“The ship had been under surveillance for two weeks, and we had people reporting to us where it was exactly,” Customs director Jose Yuchongco said.

“It came to Manila only once a week, and we had to wait until it docked in Manila before we could serve the warrant.”

Reports showed that the five-deck ship was previously owned by C/C Marine of Copenhagen. It arrived from Thailand supposedly for repairs, but it was later sold to 7107 Island Cruise Shipping Line for US$1.8 million.

Customs later learned that the ship was not on the data base of the Maritime Industry Authority. It also was not covered by an import entry, prompting it to issue an order to seize it on March 4 last year.

Cruise ship seized for tax dodging
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