Lawmakers warn of hike in sugar prices

MANILA, Philippines - Congressmen warned the public yesterday that sugar prices will soon go up in the wake of what they called “wrong” Bureau of Internal Revenue (BIR) ruling removing the commodity’s exemption from the 12-percent value added tax (VAT).

They made the warning in the course of an inquiry by the House committee on ways and means on a BIR regulation subjecting raw sugar and washed sugar to VAT, just like processed or white sugar.

Negros Occidental Rep. Alfredo Benitez, who sought the inquiry, said the new ruling would effectively increase the retail prices of raw sugar, which more health-conscious people are buying.

He said the BIR reversed itself since it previously exempted raw and washed sugar from VAT in line with the provisions of the National Internal Revenue Code (NIRC) of 1997, which does not subject agricultural products in their original state to VAT.

He said the new ruling would hurt not only consumers but also the sugar industry.

“As the sugar industry prepares for the impact of the lowering of tariff on sugar by 2015, the government should provide stronger safeguards to our local industry instead on imposing additional burden such as what the BIR revenue regulation would do,” he added.

Benitez pointed out that the BIR, in reversing its previous ruling, encroached on the power of Congress as it amended the NIRC.

He criticized the BIR for its “arbitrariness.”

Rep. Terry Ridon of party-list group Kabataan said the new regulation is another “bittersweet decision from Commissioner Kim Henares.”      

“This regulation is disastrous both for consumers and the local sugar industry. It is anti-poor, as it will impose an additional tax burden on the public. There’s nothing sweet at all about this regulation of Commissioner Henares,” he said.

He said the ways and means committee should express its collective sentiment against the ruling and in favor of the previous regulation and the NIRC provision exempting raw and washed sugar from VAT.

Marikina Rep. Romero Quimbo, committee chairman, said he was inclined to agree with the suggestion of his colleagues.

He said his committee would closely study the new regulation in relation to the VAT exemption that raw sugar enjoys under the NIRC.