Review tax perks of palm oil importers, DA told
INDUSTRY groups have asked President Ferdinand R. Marcos Jr. to revisit the Department of Agriculture’s policy on granting tax and duty-free privilege to importers of palm oil used for animal feeds compounding, following the rampant cases of technical smuggling.
Jesus L. Arranza, Chairman of the Federation of Philippine Industries (FPI) and president of the Coconut Oil Refiners Association (CORA), made the appeal in a follow-up letter to the President, who concurrently heads the Agriculture department.
In the follow-up letter, Arranza noted their intention to work with Agriculture Undersecretary Domingo F. Panganiban in putting a stop to the illegal use of imported palm oil by some “unscrupulous traders.”
“The DA should also revisit this policy of allowing zero [value-added tax] VAT and duty-free importations of palm olein as this is clearly hurting the local coconut and palm oil farmers and producers,” Arranza said in his letter to the President.
“There should be strict validation relative to such reason given by importers and effective monitoring on where these importations are actually utilized,” he added.
In a previous letter, Arranza informed Marcos that he got hold of documents that may aid the government in going after traders who managed to get duty- and tax-free privilege from the Bureau of Animal Industry (BAI) but used their importation for purposes other than compounding of animal feeds.
In a statement released on Tuesday, FPI said the imported palm oil reportedly ended up in the market as cooking oil, or was channeled to biodiesel producers as substitute to the more expensive coconut oil.
Arranza added that he and other industry leaders are ready to help the DA in launching an investigation.
In reaction to the letter, FPI said the Office of the President “promptly” directed Panganiban to act on the matter.
Weeks later, Arranza said he received a letter from the DA updating him on “alleged selling of imported animal grade palm consumption in the country.”
It appears, Arranza noted, that the DA failed to fully grasp the situation, particularly since there is no “animal grade” palm olein, and this is probably because the office of Panganiban “did not bother” to coordinate with him and other industry players to get the necessary inputs.
“The undersigned appreciates the update provided by Usec. Panganiban. We understand that this is merely a preliminary update but
unfortunately, he has not responded to my request to meet or dialogue with him so that I can share what I know about the problem as expressed in my letter to His Excellency. Also, his office has not responded to calls made by my office to obtain an appointment with him,” Arranza said.
“May I respectfully recall to His Excellency that the problem is the apparent laxity on the part of the Bureau of Animal Industry [BAI] in issuing requests to import palm olein on VAT- and duty-free basis,”
Arranza said in his second letter to the President.
Arranza, who also chairs the Fight Illicit Trade (Fightit), said the investigation should zero in on BAI, which gave permit to import tax and tax-free and all the recipient of BAI exemption“to prove that what they imported Vat-free and duty-free were really used for feeds compounding, and if not they should be put behind bars because they are killing the coconut industry and stealing money from the government. I offer my services to Panganiban, I have faith in him and I hope he will answer my call.”
“There is no closure yet on this issue; we opened it and we have to close it fairly,
expeditiously, and ferret out all illicit acts attendant to this issue, otherwise there’ll be room for other interpretations, and I thank the President for giving importance to my plea,” Arranza noted.
Meanwhile, Arranza reiterated his “willingness and availability to meet with Panganiban, preferably at the DA’S offices in Quezon City at a time convenient to him, to discuss this problem.”
“I respectfully request the President to instruct Usec Panganiban to allow the undersigned and some local coconut and palm oil players to have this dialogue and meeting so that the investigation can focus on the issues that I have revealed,” Arranza said.