MANILA - Finance Secretary Carlos Dominguez III has ordered the Bureau of Internal Revenue (BIR) and Bureau of Customs (BOC) to help the Department of Agriculture in investigating the alleged use of cooperatives by private traders as dummies for rice imports.
"There’s this question now as to why traders are using coops to import rice …. Let’s look into that because they might be using the tax advantage on rice imports,” Dominguez told BIR Commissioner Caesar Dulay and BOC Commissioner Rey Leonardo Guerrero during a recent executive committee meeting.
Through the Administrative Order No. 34 issued last October, the DA temporarily suspended giving sanitary and phytosanitary import clearances (SPSICs) to cooperatives and irrigators’ associations, which are required before they can proceed with importation, it said.
Both the DA and the Department of Finance received reports that rice traders resorted to importation rather than buying rice from local farmers.
Reports further point to the rice traders using SPSICs to avoid legal responsibilities and evade paying some of the import taxes.
Finance Undersecretary Antonette Tionko noted that while cooperatives are not exempt from paying rice import duties, they can still be exempted from paying income taxes on these imports if they are registered as "tax-exempt entities" with the BIR.
Through the AO, the DA ordered the Bureau of Plant Industry to investigate the case, and to come up with new policies and rules to protect farmers and cooperatives from exploitation.
The Bureau of Plant and Industry is a branch under the DA that looks after the country's plant industry.