Sugar producers seek TRAIN 2 suspension

MANILA, Philippines — The Confederation of Sugar Producers’ Associations Inc. (Confed) is calling on the Department of Finance to suspend not just the excise tax on fuel but the implementation of the entire second phase of the Tax Reform for Acceleration and Inclusion (TRAIN) Law.

The DOF recently announced the suspension of the hike in excise tax for fuel for at least three months which will start in January next year.

“We fear that further implementing TRAIN 2 which will raise again the levy on fuel by P2 after a three month reprieve will lead to higher production cost, ergo huge losses to the sugar industry,” Confed chairman Nicolas Ledesma said.

“We are also joining the call to suspend, or at the very least, slash the excise tax on fuel and other commodities under TRAIN 1 in the light of rising inflation,” he added.

The sugar industry has been arguing that the imposition of excise tax for fuel has significantly increased production cost given that fuel is a primary need from start to finish and with mechanization at the forefront of its program to enhance global competitiveness.

“While mechanization’s intent is to lower our production cost, the same has not been achieved because of the implementation of the TRAIN Law,” Ledesma said.

The Sugar Regulatory Administration (SRA), for its part, also welcomed the decision of the economic managers to suspend the tax hike as this will augur well for the industry that uses oil as a primary component in sugar production.

“How can our sugar planters, particularly the small farmers and agrarian reform beneficiaries that comprise over 80 percent of sugar producers, continue to compete when they have to contend with the  high cost of fuel?” SRA board member Dino Yulo said.

“We hope  the suspension will be at least for six months to a year, or until the people fully recover from the effects of the implementation of TRAIN 1,” he added.

Meanwhile, 16 private companies will import 150,000 metric tons (MT) of sugar.

The big firms include Universal Robina Corp., Coca-Cola, Pepsi Cola, Nestle Philippines, and Interbev.