Sugar farmers and a member of the sugar board have thrown their support behind the proposed suspension of the additional excise tax on fuel under the second tranche of the Tax Reform for Acceleration and Inclusion (TRAIN) law to aid planters in coping with rising production costs and bring down the price of the sweetener in the market.
Sugar Regulatory Administration (SRA) Board Member Emilio Yulo, who represents the planters sector, proposed that the suspension on the oil excise tax hike should be at least six months instead of the three-month reprieve.
“Sugar farmers and a member of the sugar board are proposing to suspend the excise tax on fuel under the second tranche of the TRAIN law for at least six months to aid planters cope with rising production costs,” Yulo said in a news statement issued on Thursday.
“Part of our mandate in SRA is to encourage mechanization of farms to make these more efficient and globally competitive. How can our sugar planters, particularly the small farmers and agrarian-reform beneficiaries that comprise over 80 percent of sugar producers, continue to compete when they have to contend with high cost of fuel?” Yulo added.
The Confederation of Sugar Producers’ Associations Inc. (Confed), which accounts for 60 percent of the total planters in the country, has also expressed support to suspend the additional hike on oil prices starting January 1, 2019.
“Fuel is a primary need of the sugar industry from start to finish, and with mechanization at the forefront of our program to enhance our global competitiveness, the imposition of excise tax for fuel has greatly increased our production cost,” Confed said in a separate statement.
“While mechanization’s intent is to lower our production cost, the same has not been achieved because of the implementation of the TRAIN law.
We fear that further implementing TRAIN 2, which will raise again the levy on fuel by P2 after a three-month reprieve, will lead to higher production cost, ergo huge losses to the sugar industry,” Confed added.
Confed also backs the idea of extending the suspension on additional excise tax beyond the three-month reprieve but did not give a specific timeline.
“We appeal to President Rodrigo Duterte to extend the suspension in behalf of the 5 million direct and indirect stakeholders of the sugar industry,” it said.
“Coupled with that fact is the recent joint agreement by the Sugar Regulatory Administration and our economic departments to cap a price on sugar, industry stakeholders, which comprise mostly of small planters and agrarian-reform beneficiaries, will have to bear the cost of rising fuel prices in the event that the national government will enforce the TRAIN laws,” it added.
The group also proposed to cut also the additional taxes imposed on other commodities, such as sugar, aside from fuel to arrest the country’s rising inflation.
“We are also joining the call to suspend, or at the very least, slash the excise tax on fuel and other commodities under TRAIN 1 in the light of rising inflation,” it said.