September 3, 2015
Business World (Melissa Luz T. Lopez) | http://goo.gl/96DvJc
THE HOUSE of Representatives has approved a measure exempting brown sugar from value-added tax (VAT). The chamber approved on third and final reading last Tuesday a bill that expands the definition of raw cane sugar to include brown sugar, effectively exempting the commodity from VAT.
This paves the way for the Senate to pick up deliberations on the bill. As a rule, all tax measures must originate from the House.
Rep. Jeffrey P. Ferrer, who represents the first district of the sugar-producing province of Negros Occidental, proposed House Bill 5713 to “clarify” the VAT-free sugar products under the National Internal Revenue Code of 1997.
The measure also seeks to overrule Revenue Regulation 13-2013 of the Bureau of Internal Revenue (BIR), which limited VAT exemptions to muscovado as the only accepted “raw sugar” product.
On May 22, the BIR eventually issued Revenue Regulation 8-2015 which amends the previous rules to finally include brown sugar as part of the considered exemptions to VAT, acknowledging it as a raw cane sugar product.
Given the “flip-flopping” on the definitions, Mr. Ferrer said a law is needed to settle the matter.
Other raw sugar products that exempt from VAT are blanco directo, premium raw, special raw, washed sugars, and muscovado.
Meanwhile, refined or white sugar continues to be subject to VAT, which means an additional 12% tax passed on to consumers.
Once the Senate approves the bill, it will be sent to Malacañang for signing into law. -- Melissa Luz T. Lopez