RICE industry groups on Wednesday hailed the Bureau of Customs’ decision to charge erring importers who undervalued their imports, calling it a victory for Filipino farmers since the amount to be collected from them could mean additional funds to support local production.
They urged the BOC to allocate the tariff recoveries from the audits on over 40 erring rice importers to the government’s rice competitiveness enhancement fund (RCEF).
They also pressed the government to chase the “real” importers, as some of the audited rice importers could be just cooperatives that serve as dummies or fronts of unscrupulous traders.
The Federation of Free Farmers (FFF) and Rice Watch and Action Network (R1) had noted that cooperatives used by unscrupulous traders, which include some farmers-led groups, could be caught in a crossfire as the BOC digs deeper on the issue of rice import undervaluation.
And the BOC could be running the risk of collecting lesser or no charges if the dummy cooperatives are indeed found liable for the rice imports undervaluation since it was their names that were used for the shipments.
“We call on the BOC to go hard on these importers and to also prevent this from happening again in the future,” R1 Executive Director Hazel A. Tanchuling told the BusinessMirror.
Tanchuling said BOC’s latest action is crucial in alleviating the problems of the rice producers and improving their productivity.
“Collecting the right tariffs is important because the amount collected should go back to the farmers in support,” she said.
“So, losses in tariff revenues also reduce potential support to farmers heavily impacted by liberalization,” she added.
FFF National Manager Raul Q. Montemayor told the BusinessMirror that the BOC’s possible tariff recoveries should be part of the RCEF.
“We think that the tariff recoveries should form part of the rice fund. As for the penalties, which could be higher than the tariff recoveries, it is not clear if it will go to RCEF since the RTL [rice trade liberalization law] talks only of tariffs,” he said.
“We will need to evaluate where the additional money will be spent best, but either way, it would be of great help,” he added.
Rice tariff lib
The RTL law mandates that rice tariffs collected by the government since its enactment in March 2019 until 2024 should be earmarked for the government’s RCEF.
Latest estimates of the FFF showed that unscrupulous rice importers may have shortchanged the BOC of nearly P2.8 billion since the implementation of the RTL law.
In a separate statement on Wednesday, the FFF also reiterated its call on the government to be more stringent in approving farmer cooperatives and groups as eligible rice importers, as the practice of using dummy schemes by unscrupulous traders continues today. (Read this Broader Look piece: https://businessmirror.com.ph/2019/10/31/pre-and-post-rice-trade-liberalization-law-big-traders-gaming-farmer-groups/)
“Even if a co-op importer is found guilty of undervaluation, BoC might not be able to collect anything because many of these co-ops actually have very little funds or assets, and might be dormant already. Meanwhile, the actual importer who financed the shipments will go scot-free,” the FFF said.
Customs Assistant Commissioner and spokesperson Vincent Philip Maronilla told the BusinessMirror that “a percentage” of the P1.4-billion combined charges to be collected from the erring audited rice importers will go to the RCEF.
“Yes. A percentage of the collection will be allocated for RCEF,” Maronilla said in a message.
Pressed on the specific percentage of the total charges that could be allotted for RCEF, the BOC official said: “It will be determined by our collection service following the provision of the law.”
He said their legal department has yet to resolve whether penalties and surcharges which form part of the P1.4-billion charges could also be allocated to RCEF.
Of the P1.4-billion charges, Maronilla said the duty component amounted to at least P600 million, while the remaining P800 million were penalties and surcharges.
However, Maronilla said “not all” duties to be collected from the undervalued rice imports would go to the RCEF.
“Insofar as to the portion of additional duties and taxes, yes [that could be used for RCEF],” he said. “But insofar as to the penalties that are yet to be determined, whether that could be considered” for credit to RCEF has yet to be decided, he added.
The BusinessMirror earlier reported that over 40 rice importers were told by Customs to pay a combined total of P1.4 billion in “additional audited assessment” after the BOC found them liable for undervaluing their rice shipments from March to June last year. (Read story here: https://businessmirror.com.ph/2020/09/23/rice-importers-charged-p1-4-billion-on-undervaluation/)
The FFF urged the BOC to fast-track the resolution of the audit cases and “finally end the practice of undervaluation” so that farmers would receive the correct amount of benefits that they should get from rice tariff collections.