The Bureau of Customs (BOC) maintained its position that the retroactive collection of additional 35% tariff on imported mechanically deboned meat (MDM) is legal.
The statement was issued after the Meat Importers and Traders Association (MITA) decried a recent BOC order to collect retroactively payment of the additional duty from March 5 to 16, on top of the 5% already paid by importers for the period covered.
The collection of additional duty is in keeping with implementation of the Rice Tariffication Law, which took effect on March 5 and which reverted the duty of certain agricultural products, including MDM, to their previous levels.
The new rate, however, was only reflected in BOC’s electronic-to-mobile system on May 16. As a result, importers paid only a 5% tariff on MDM for more than two months when they should have paid 40% under the Rice Tariffication Law.
But after the 40% rate was implemented for just a few weeks, President Rodrigo Duterte signed on June 13 and issued on June 17 Executive Order (EO) 82 series of 2019, maintaining the duty of certain meat and poultry products under EO 23, issued in 2017, until December 31, 2020. Under EO 82, the duty for imported MDM is 5%.
“They (BOC) 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 was quoted in a report by The Philippine Star on July 2.
Prior to the issuance of EO 82, Philippine meat processors called on government to maintain the lower tariff rates on MDM, a key raw material in food production, to prevent prices of processed meat products like hotdogs from increasing.
BOC in response said that pursuant to Section 430 of the Customs Modernization and Tariff Act, “the assessment on the said imported goods [is] not yet final and therefore [is] still subject to the proper collection of the rightful duties and taxes on the imported goods.”
“And it is a bigger neglect on the part of BOC not to collect the legally prescribed duties in behalf of the government,” the customs bureau added.
BOC assistant commissioner Atty. Vincent Philip Maronilla said “BOC is open to a dialogue with the concerned stakeholders in order to come up with a solution to allow us to implement the law correctly and to accommodate some of their concerns.”
