By Jasper Emmanuel Y. Arcalas & Bernadette D. Nicolas
The Federation of Free Farmers (FFF) said the Bureau of Customs (BOC) will form a ”small” group that would address the alleged undervaluation of rice imports to boost government’s tariff revenues and help farmers.
FFF National Manager Raul Q. Montemayor said his group recently met with BOC officials together with representatives from the Department of Agriculture, National Food Authority and Department of Finance to discuss the possible undervaluation of rice shipments.
During the meeting, Montemayor said they raised various issues concerning the BOC’s import assessment system that unscrupulous traders may have taken advantage of to undervalue imports and to avoid paying more tariffs.
Among the issues raised by FFF during the Friday meeting was the free on board (FOB) prices of rice shipments, freight and insurance costs, tariff line classifications as well as lower tariffs slapped non-Asean countries, he added.
“We want to help the [BOC] to generate more revenues for urgent concerns. [Also,] the excess tariff collections would [go to] the rice competitiveness enhancement fund, which will provide the DA and the farmers additional support,” Montemayor told the BusinessMirror on Sunday.
Based on its study, the FFF found that since the enactment of the rice trade liberalization law in March 2019, certain rice imports from China, India and Pakistan, were slapped with incorrect tariff.
The FFF study showed that some 2,625 metric tons (MT) of rice from China entered the country from March to April at zero tariff. The group said rice imports from China should be slapped with a 50-percent tariff based on existing laws.
Montemayor said his group also proposed to the BOC to fix the tariff classifications of rice imports entering the country as some importers declare their shipments under tariff lines that have low reference prices. This, he said, could be one way for unscrupulous traders to undervalue imports.
He said rice imports are being declared under the tariff heading of 100640, or broken rice, when in fact the grades of the shipments should be classified under 100630, or whole rice.
“They said they will scrutinize it and will create a small group to focus on it. They seem to be serious about it,” he said.
During the meeting, Montemayor said a finance official agreed with the findings of FFF that there could have been possible undervaluation of rice imports since the RTL law was enacted.
Since the implementation of RTL law last March 2019, the FFF has raised the issue of undervaluation of rice imports, which deprives the government of additional revenue that could have been allocated to the RCEF.
In its latest computation, FFF said the government lost at least P890 million in tariff revenues from over 766,000 MT of rice imported from January to April. The FFF said it estimated that undervaluation in rice imports last year resulted in a tariff shortfall of P1.9 billion.
Sought for comment, Customs Assistant Commissioner and Spokesman Vincent Philip Maronilla said it is still “too early to jump to any conclusions, especially on the amount of potential additional revenues” that could be raised from resolving the undervaluation of rice imports raised by the farmers’ group.
“They explained their data and we committed to work with them to validate these data and impose corrective measures if needed,” Maronilla said in a message to the BusinessMirror.
“After the validation of data, subsequent meetings will be set to discuss ways to move forward.”
Maronilla also said the BOC invited the FFF to join their pool of Industry Commodity Experts.
“The BOC under the leadership of Commissioner Rey Leonardo Guerrero has always been open to private- public partnership with our local agricultural industry in the resolution of any issues they may have relating to agricultural product imports,” he said.