The Sugar Alliance of the Philippines is filing a case against the Bureau of Internal Revenue for imposing a revised revenue regulation that places raw sugar under Value Added Tax coverage, Manuel Lamata, United Sugar Producers Federation of the Philippines president, said yesterday.
The sugar federations had decided since last week to jointly file the case against the BIR, to ensure the survival of the sugar industry, especially the small farmers who comprise 90 percent of the industry, Enrique Rojas, National Federation of Sugar Planters president, said.
Imposing VAT on raw sugar will not only affect industry stakeholders but 90 million Filipino consumers of sugar, he said.
They wrote an appeal to the BIR but it seems the Bureau has decided to go ahead with BIR Revenue Regulation 13-2013, Rojas said.
Rep. Alfredo Abelardo Benitez (Neg. Occ., 3rd District) Monday said sugar industry stakeholders should file a unified suit in court to prevent the BIR from imposing VAT on raw sugar.
“It is useless to talk to her (BIR Commissioner Kim Henares) at this point, we are better off going to court to prove our point,” he said.
Benitez said he spoke to Henares and her contention is that what is called raw sugar is really brown sugar that is technically refined sugar colored brown, and therefore, must be covered by VAT.
The Sugar Alliance will be filing a case against the revised revenue regulation of Henares “to correct the wrong definition of raw sugar”, Lamata said.
“We believe she was given the wrong information,” he said, adding that through the court, they will prove their point.
“We are confident that the court will give us the opportunity to show her the correct definition. We will win this case,” he said.
They have signed a letter of complaint against the revised revenue regulation addressed to Henares and Finance Secretary Cesar Purisima, which is a requirement before filing the case, to be delivered to them today, Lamata added.
Sugar groups around the country are joining the filing of the suit to send a strong message that this is an industry struggle, he said.
Rafael Coscolluela, president of the Confederation of Sugar Producers Associations, said it would be useful for government to seek other modes of taxation that will be a win-win for government and all producers, especially the small farmers, whose margins will be severely affected by the VAT on raw sugar.*CPG