Meat traders decry higher duty on deboned meat

MANILA, Philippines — Businesses and commodity prices are threatened by a Bureau of Customs (BOC) order requiring meat importers to pay the higher duty of 40 percent on mechanically deboned meat (MDM) which became effective with the implementation of the rice tariffication law, meat traders said.

The Meat Importers and Traders Association (MITA) slammed the recent directive of the BOC ordering payment of the 35 percent duty on top of the five percent duty already paid on MDM used for the period March 5 to 16.

“They want to collect retroactively and that is unfair because importers filed the duties and everything was done in good faith. They have sold the products based on the landed cost and importers don’t have the money to pay,” MITA president Jess Cham told The STAR. 

BOC is collecting the 35 percent balance as the implementation of the rice tariffication law, which took effect and replaced the quantitative restriction (QR) on rice on March 5, brought back the duty of certain agricultural products, including MDM, to its previous levels.

The government, which previously slapped MDM with a 40 percent duty, reduced the tariff to five percent as a concession to the QR on rice in 2012.

However, the E2M Customs System which reflects how much importers need to pay, did not reflect the higher duty until May 16. This means that for more than two months, importers were only paying five percent when they should have paid 40 percent. 

MITA argued that BOC is remiss in its duty as they even had to seek help from the Tariff Commission to determine the correct tariff rates.

“Their basis is flawed and is unjust and unfair to the importers. They were remiss in their duties and they are guilty if they did not update their system. We should not pay for their remiss,” Cham said.

“They did not tell us beforehand they will be getting the balance eventually. The system was showing the five percent. Everybody was in the dark waiting for what will happen to finalize something. We are not saying it is their fault, but it definitely is not ours,” he added.

BOC managed to collect the 40 percent tariff starting May 17, until two weeks ago when President Duterte issued Executive Order 82 retaining the five percent tariff for MDM.

Now, BOC in its demand letter, is asking importers to pay within 15 days or face an imposition of up to 25 percent surcharge and interest until paid.

“They can do a lot of things. They can cancel our permits, suspend our importation so as not to allow us to process, stall our shipments at the ports or force us to pay. We think that BOC see this as a way to boost their collection,” Cham said. 

“In effect a lot of small business will go out and will be bankrupt. The larger ones will have to pass this on to the consumers because they will of course, recover their prices,” he said.