AN agriculture industry group said imposing the 40-percent tariff on imported mechanically deboned meat (MDM) of chicken would generate additional P5 billion in revenues for the government that could be used to vaccinate about 11 million farm workers.
The Samahang Industriya ng Agrikultura (Sinag) is urging the government to retain the higher tariff on MDM, about a week left for President Duterte to decide on whether he would keep the 5-percent tariff on the imported raw material or not.
The Cabinet-level Committee on Tariff and Related Matters (CTRM) had earlier endorsed to President Duterte its recommendation to retain the tariff of MDM at 5 percent.
However, without a new EO, the Bureau of Customs (BOC) has started collecting 40-percent tariff on imported chicken and turkey MDM after EO 82, which halted the effectivity of the higher rate and retained the lower rates on the raw material last year, expired last December 31. (Related story here: https://businessmirror.com.ph/2021/01/05/ctrm-for-5-mdm-rate-as-boc-slaps-40-tariff/)
“Similar to the health sector, our food producers that bring food to our tables are at the forefront of our battle against the Covid-19 pandemic,” Sinag said.
The industry group claimed consumers would only pay an additional P1.20 for a 350-gram luncheon meat and P0.525 for a 150-gram meat loaf if the tariff for MDM would be kept at 40 percent.
“Shelling out an additional Php 0.525 to vaccinate 11 million in the agriculture sector is a good start for our fight against this global pandemic,” it added.
The group explained that a lower tariff on imported MDM would “deprive the government of much-needed revenues” that could fund its programs, particularly vaccination, in light of the Covid-19 pandemic.
“MDM importation last year was 254 million kilograms. At an average P50 per kilogram, at 5 percent tariff, the government will only be able to collect P635 million. A 40-percent tariff, however, will increase government revenues to P5.08 billion, or an additional revenue of P4.44 billion,” it said.
The meat processing industry has warned for years now that a reversion to a 40-percent tariff on imported MDM, a key raw material used to produce hot dogs, luncheon meat, among others, would jack up retail prices of processed meat products.
Last year, San Miguel Food and Beverage Inc. (SMFBI) Senior Vice President for Corporate Affairs and Strategic Planning Group Rita Imelda Palabyab projected retail prices of hot dogs rising about P20 per kilogram if the tariff rate applied on MDM of chicken reverts to 40 percent. Local economists have also backed the recommendation of the economic team to keep the 5-percent tariff on MDM.
Former University of the Philippines School of Economics Dean Ramon L. Clarete told the BusinessMirror that retaining the 5-percent tariff on MDM will help consumers in the long run, especially the poor.
“Okay, your revenues will increase but that is just penalizing the consumers of processed meats, hot dogs. It’s a crazy measure [reverting to a 40-percent tariff],” Clarete said in a phone interview. “Processed meats are part of the menu of our lower income households.”