Duties down to zero for some imports

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THE Philippines is now implementing zero duty on some products imported from a few ASEAN countries, a development expected to negatively impact revenues of the Bureau of Customs (BOC).

At the start of the year, Philippines adopted Executive Order (EO) 850 which lowered import duties to zero for certain imported articles from Brunei, Indonesia, Malaysia, Singapore and Thailand. This is part of the country’s commitment to eliminate tariff on remaining products in the 2010 inclusion list under the Common Effective Preferential Tariff (CEPT) scheme for the ASEAN Free Trade Area (AFTA) / ASEAN Trade in Goods Agreement (ATIGA).

President Arroyo signed the EO on December 23, 2009.

The Philippines, through the National Economic and Development Authority, approved the elimination of tariff on various products in the Philippine CEPT last December 8.

In January 2003, the protocol to amend the agreement on CEPT scheme was signed.

The 21st AFTA council meeting held on August 23, 2007 agreed to enhance the CEPT agreement into a comprehensive trade in goods agreement for AFTA.

In February this year, the ATIGA was signed and ratified by President Arroyo in August.

ATIGA is a product of enhancement and consolidation of all existing provisions under the CEPT agreement and relevant ASEAN economic agreements and instruments.

Among articles granted zero duty in 2010 under the CEPT scheme for the AFTA are live poultry such as fowls of the species Gallus domesticus, ducks, geese, turkeys and guinea fowls weighing not more than 185 grams.

Also included are meat of bovine animals, fresh or chilled, whose previous rates were 5%.

In applying for zero rates, companies need documents such as an Authority to Import issued by the Department of Trade and Industry (DTI).

Under DTI Department Order 09-03 series of 2009, only existing manufacturers may be accredited as importers under the JPEPA. This excludes traders engaged in purely buying or selling.

Meanwhile, the BOC said the lowering of duties to zero will have negative effects on its revenue collection especially at a time when all are still feeling the effects of the prolonged global economic crisis.

Just like the Japan Philippines Economic Partnership Agreement implemented recently, the BOC said it will lose a significant source of revenues with the application of the EO.