August 20, 2015
Melissa Luz T. Lopez (Business World)| http://goo.gl/o55Rr2
A HOUSE of Representatives panel has approved a measure that exempts brown sugar from value-added tax (VAT).
The House Committee on Ways and Means approved on Thursday the bill amending the Tax Code stipulating the VAT exemption for brown sugar.
Rep. Jeffrey P. Ferrer, who represents the first district of the Negros Occidental, proposed House Bill 5713 to “clarify the definition” of raw cane sugar under the National Internal Revenue Code of 1997.
The measure also seeks to overturn Revenue Regulation 13-2013 of the Bureau of Internal Revenue (BIR), which limited VAT exemptions to muscovado, a dark form of sugar with high molasses content, defining it as the only acceptable product in the “raw sugar” category.
The BIR in March came out with a new Revenue Regulation, 4-2015, to also limit the VAT-exempt products classified under “raw cane sugar” to muscovado.
And then on May 22, the BIR issued Revenue Regulation 8-2015, amending the previous rules to finally include brown sugar as among the exempt products, with the bureau acknowledge it as a form of raw cane sugar.
Mr. Ferrer said legislation is needed to put the matter of which products qualify as raw sugar beyond interpretation.
“In light of this seeming ambiguity and its effect on the sugar planters, its dependents, and particularly the consumers who will bear the brunt of the added imposition of VAT, Congress is duty-bound to clarify its intent and immediately act to protect the interest of the Filipino people,” Mr. Ferrer’s bill reads.
“Brown sugar is being subject to VAT, so we need to bring back the structure where it is exempted,” committee chairman and Marikina Rep. Romero Federico S. Quimbo (2nd district) told reporters.
Refined or white sugar is subject to VAT, which means an additional 12% tax.
The measure must be approved for succeeding second and third readings in the House and taken up by the Senate before it is signed into law.