February 14, 2015
InterAksyon by Orti Despuez | http://goo.gl/UzjeaX
MANILA – The government agency overseeing the sugar industry warned that new tax rules could cause a shortage.
Sugar Regulatory Administration (SRA) chief Ma. Regina Bautista-Martin said a growing number of millers in Negros are unable to dispose of their production because of Revenue Regulation 11-2014, which slaps a one percent withholding tax when raw sugar is withdrawn from the mills.
The Bureau of Internal Revenue (BIR) last month implemented RR 11-2014, which requires operators of sugar mills and direct buyers of quedans or molasses storage certificates to withhold the creditable income tax and remit the same to the agency based on the applicable base price of P1,000 per 50-kilogram bag and P4,000 per metric ton, respectively.
The BIR regional director issues the authorization allowing the release of sugar to the mill operators for processing into refined sugar, consumption or other purposes. The authorization however requires proof of payment of the creditable withholding tax and bank payment.
“I was bombarded with so many texts, which seemed so alarming. Planters associations in the largest sugar mill and refinery in Negros, Victorias Milling Company, are complaining that no bidders are buying their sugar,” Martin said.
Negros supplies 60 percent of the country’s sugar.
Martin said agrarian reform beneficiaries and small planters could not sell their sugar because the BIR is demanding official receipts Ors) from them.
“Even poor farmers who could hardly afford to buy enough food for their families are required to obtain official receipts. It’s additional burden for them. Worst is, the market will be dried up with sugar,” she said.
“Sugarcane farmers are having difficulty selling their produce since they are now required to issue ORs. We have to remember that these small farmers/holders, for so many years, don’t even have an ITR or TIN,” she said, referring to income tax returns or tax identification numbers.
Millers warned that failure to withdraw refined sugar from the mills may result in tight supply in the local market, if not higher prices.
“In fact, there were two bidding slated last week. The problem is that we don’t have bidders. Traders don’t want to buy sugar until planters satisfy the requirements of the BIR on the 1 percent withholding tax,” Jesus Barrera, the millers' representative to the Philippine Sugar Board' said.
In addition, the Philippines may miss its export commitments.
“Traders have already signified that they may miss the March 15 deadline for our sugar exports to the US. We’re supposed to ship 36,000 to 38,000 metric tons,” Barrera said.
“If we missed the second deadline, we have to move the timetable for the remaining sugar quota volume allotted for the US,” he added.
The Philippines enjoys a sugar quota in the US, amounting to 138,827 metric tons (MT).
“Washington may hold it against us, and may reduce our sugar export allocation in the following years,” Barrera said.