‘Rice tariff collection misleading’

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    The Federation of Free Farmers (FFF) yesterday questioned claims of the Bureau of Customs (BOC) that tariff collections on rice imports have reached P10.73 billion as of July 17, 2020 compared to the previous year’s P9.94 billion despite a 24.6 percent drop in the volume of rice imports.

    The group said those claims are “deceptive and diversionary.”

    “The agency is using seemingly improved numbers in tariff receipts to mask its failure to collect correct revenues from rice importers. It is hiding the fact that undervaluation of imports and its collection performance worsened this year,” said Raul Montemayor, FFF national manager.

    Montemayor said private sector import volumes this yearis small because the 500,000 metric tons (MT) of duty-free rice brought in by the National Food Authority in January and February 2019 were excluded from the comparison

    He said based on their analysis, BOC’s collection efficiency fell significantly in 2020 based on FOB (free on board or the cost of imports at the point of origin) and CIF (Cost or FOB plus insurance and freight) prices.

    FFF said in the first five months of 2020, rice importers declared FOB prices of their imports averaged P16, 923 per MT, which was lower than the BOC’s own reference prices by P 2,416 per MT.

    FFF alleged this leads to a 155 percent increase in undervaluation of FOB prices as last year’s average gap in FOB prices was only at P945 per MT.

    The group also said declared CIF prices, which are the basis for tariff payments were lower than BOC reference rates by P3,292 per MT on the average from January to May 2020. But the gap was only at P1,943 per MT in 2019.

    FFF added t the declared CIF prices of imports per MT increased from P17,510 in 2019 to P17,723 in 2020 whereas BOC’s own reference prices during the same period rose by P1,603 per MT.

    This would explain why the agency’s tariff collections increased only marginally by 1.3 percent from P6.13 per kg of rice imports in 2019 to P6.21 per kg in 2020.

    “And yet, FOB prices of rice have gone up by at least 10 percent in 2020 due to the COVID pandemic and supply uncertainties in Vietnam and other rice exporting countries.

    Considering that tariffs are applied on import values, the fact that the increase in tariffs collected per kilo was way below 10 percent indicates that the degree of undervaluation by importers actually intensified in 2020,” Montemayor said.

    He asked BOC to address undervaluation and misdeclaration “more seriously” instead of just issuing misleading statements as the country needs tax revenues to combat the effects of the pandemic as well as the much needed aid for rice farmers.

    The FFF also urged the private sector to declare correct values on their imports and pay the right taxes.