No sugar tax moratorium: CONCERNS TO BE RELAYED TO HENARES

March 3, 2015
Daily Star by Carla Gomez |

Bureau of Internal Revenue Region 12 officials yesterday said they could not grant a 120-day moratorium on Revenue Regulation 11-2014 that imposes a one percent creditable withholding tax on raw sugar and molasses upon withdrawal from the mills.

All they could say was that they would relay the concerns raised, especially by small sugar farmers, to BIR Commissioner Kim Henares.

The BIR Region 12 officials led by Regional Director Mryna Leonida and chief legal counsel Ric Cabrera held a dialog with sugar industry stakeholders yesterday to explain the RR 11-2014 requirements at their office in Barangay Taculing, Bacolod City.

They will go on implementing RA 11-2014 unless stopped by Henares, they cannot grant a moratorium without the approval of the BIR commissioner, Cabrera said.

Rafael Coscolluela, president of the Confederation of Sugar Producers Associations, in a separate interview yesterday, said that, in a meeting with Henares last week, the Philippine Sugar Millers Association asked if the implementation of RA 11-2014 could be suspended and she right away said it could not.

Henares, however, said she was willing to dialog with industry stakeholders to explain why RR 11-2014 is being imposed, he said.

At the dialog yesterday, Enrique Tabino, legal counsel of the Sugar Alliance of the Philippines, asked the BIR for a 120-day suspension of RA 11-2014 to give small farmers time to comply with its requirements.

Leonida asked him to put the requests in writing, along with the concerns raised so they could be submitted to the BIR commissioner.

Under the revenue regulation, the documentary requirements for the authorization allowing the release of locally produced raw sugar and molasses, includes the taxpayer identification number (TIN).

The agrarian reform beneficiaries present at the dialog said its is difficult for them to get TINs because they have to present National Statistics Office certified birth certificates. They said many of them do not have birth certificates because they were born in remote areas and their births were not registered.

The ARBs also complained that the BIR presentation of RR 11-2014 during the dialog was made mostly in English and Tagalog that they do not understand.

Tabino said the problem with the BIR is that it is only now that they are explaining the requirements to the stakeholders but they have been implementing RR 11-2014 since January.

The BIR is saying that farmers can sign affidavits of undertaking for their sugar to be released in the meantime, but the small farmers are having difficulty meeting the requirements for that, too, Tabino said.

The small farmers have been complaining that because of their inability to meet the required documentation sought by the BIR traders have not been buying their sugar, he added.

Tabino said 95 percent of the members of the Sugar Alliance of the Philippines are small farmers, the majority of whom earn less than P100,000 annually.

Meanwhile, those who have not completed the requirements for RR 11-02014 can sign an affidavit of undertaking for the release of their sugar from the mills, Leonida said.

Leonida also said the BIR has released all Authorities to Release Sugar to allow sugar withdrawals.

Cabrera said RA 11-2014 is not something just concocted d by the BIR, it is prescribed by Congress under the tax code.

“We are just loyal soldiers implementing the law,” he said.

Cocolluela said the 1 percent creditable tax is deducted from the tax payable by the taxpayer.

However, many of the ARBs are saying that they do not even earn enough to have a taxable income, he said.

The cooperatives are also saying they are exempt from the 1 percent tax, but the BIR says otherwise, he added.

Henares said the 1 percent tax is the BIR’s way of ensuring everybody pays taxes, and the small farmers who do not have any taxable income can claim for reimbursements.

Can you imagine small planters filing for reimbursements when they do not even file income tax returns in the first place, Coscolluela said.

Henares said they were forced to implement RR 11-2014 because the sugar industry did not give the BIR the list of planters and traders it sought.

She also said all those who plant sugarcane are businessmen and should learn the practices of businessmen, whether big of small, who are required TINs and official receipts for their sales, Coscolluela said.

When it was pointed out to Henares that this is difficult for small farmers, she said “That is why there are people who are hard up because we think hard up all the time,” Coscolluela added.

Very clearly Kim Henares is not prepared to back out,” he said.

Coscoluela said she has points that taxpayers have to understand, too.

Manuel Lamata, president of the United Sugar Producers' Federation of the Philippines, said he thinks the dialog yesterday was more of compliance.

“They told us to write the letter request to have a 120-day moratorium to be able to sit down with the BIR commissioner and try to come up with a final tax scheme for the whole industry. They also heard the plight of the small planters, which was very real and heart-breaking,” he said.

Lamata pointed out that in Negros Occidental alone there are about 60,000 small farmers in the sugar industry.

Negros Occidental Gov. Alfredo Marañon Jr. said the 1 percent tax should not be imposed on sugar farmers, they should bring the BIR to court to question the validity of RA 11 -2014.