The Bureau of Internal Revenue (BIR), seeking to ensure that the right amount of tax is collected amid a demand spike for sugar, has created a task force to undertake an inventory of sugar stocks and monitor incoming shipments of the commodity.
In a report to Finance Secretary Carlos G. Dominguez III, BIR Commissioner Caesar R. Dulay said the task force is instructed to monitor not only importers, but also millers, planters, traders and dealers of refined sugar.
The BIR chief said he had already wrote the Sugar Regulatory Administration (SRA) in July asking for data on sugar importers, with BIR Deputy Commissioner Arnel S.D. Guballa adding that the bureau was able to collate an initial list of millers and planters who have sold their rights to import sugar.
“The task force on sugar is undertaking [an] inventory stock-taking, validate the volume of imports based on allocations, and ascertain the payment of correct taxes by importers, local planters and millers,” Guballa said during a recent executive committee (Execom) meeting.
On top of ordering the BIR to ensure that importers are paying the correct amount of taxes, Dominguez also directed the BIR and Finance Undersecretary Gil S. Beltran to review the current policy of the SRA allowing farmers and planters’ associations that are awarded import allocations to sell their rights to traders.
Dominguez explained that local sugar millers and planters who sell their importation rights should also be taxed as they make a profit from such transactions.
Based on preliminary data gathered by the BIR, traders pay local millers and planters who sell their rights at around P500 per bag.
“That has an import duty, and the one who received that payment for the right to import…should also be taxed. Talk to the SRA about this and raise all these issues,” the finance chief told BIR officials during the Execom meeting.
Dominguez added that, as a result of the current system of traders buying rights to import sugar, the price of the commodity has remained high in the retail market.
“They [traders] are able to bring down the landed cost of sugar here by only a very small amount because there’s this fee that is paid to be able to buy rights to import sugar,” he added.
Last month the Bureau of Customs (BOC) filed a number of smuggling charges against sugar importers for committing large-scale agricultural smuggling. The move is in support of the government’s call to fight the unlawful importation of agricultural products into the country.
Criminal charges were filed on August 31 against the officers of Red Star Rising Corp. and Santa Rosa Farms for smuggling millions worth of sugar and rice, respectively.
Three criminal charges were filed against the responsible officers of consignee, Red Star Rising Corp., namely, Dante P. Lunar, Leonardo C. Mallari, Richel Paranete Llanes, August Presillas Templado and Bernie Abrina Rubia, “for unlawfully importing white sugar into the country with an aggregate value, including duties and taxes of P21.558 million.”
The three shipments of Red Star composed of a total of 16 20-footer containers, and were described in the manifests as containing packaging materials, kitchen utensils and kraft paper.
The shipments from Thailand arrived at the Port of Manila on different dates in July 2018, with the shipment discovered to contain white sugar after close examination. The shipments also lacked the required import permit from the SRA.