THE Bureau of Customs (BOC) maintained that it followed the law in demanding more money from traders that paid a lower tariff of 5 percent on mechanically deboned meat (MDM) of chicken after the effectivity of the rice trade liberalization law.
In a letter sent to the Meat Importers and Traders Association (Mita), BOC-Manila International Container Port District Collector Erastus Sandino B. Austria also said the agency was not retroactively applying the 40-percent tariff rate on chicken MDM.
“With the effectivity of Republic Act [RA] 11203, or the ‘Rice Tariffication Law’ on March 5, 2019, the imposition of higher rate of duty is in fact a prospective application of the law,” the letter read.
Austria cited Executive Order (EO) 23 issued by President Duterte in April 2017, particularly section 6 which pertained to the effectivity of the order.
“This Order…shall be applicable until June 30, 2020, or until such time that a law amending certain provisions to rice tariffication in RA 8178 is enacted, whichever comes first after which the MFN [Most Favored Nation]rates of duty as provided for in Columns 8 of Annexes A and B shall then apply,” the EO read.
Since RA 11203 amended RA 8178, Austria said the BOC applied the 40-percent tariff rate as indicated in EO 23’s Column 8.
However, the E2M system of the BOC did not immediately reflect the 40-percent tariff rate last March 5 when the new law took effect. This resulted in traders being assessed a 5-percent tariff rate for their chicken MDM shipments.
The E2M (electronic-to-mobile) system was rolled out by the BOC in 2008 to streamline imports and exports processing.
“Accordingly, it was recommended that those shipments, covering the period of March 5, 2019, to May 16, 2019, be forwarded to the Liquidation and Billing Division of this Port for the issuance of demand letters. Said demand letters reflect the issuance in customs duties between the previous 5 percent and the correct 40 percent rates of duty,” the letter read.
“It is within the ambit of this Port to verify, check and review computations of formal, informal and withdrawal entries based on the applicable foreign exchange rates, the correct dutiable and taxable values,” it added.
Last June, the BOC said importers of MDM of chicken whose shipments were assessed a lower tariff of 5 percent even after the effectivity of the rice trade liberalization law in March will have to pay the government more.
Chicken MDM is a key component for processed meat products, such as hot dogs and canned luncheon meat.