The Philippine Exporters Foundation Region III (PhilExport R3) is requesting the Bureau of Customs (BOC) to reconsider the reclassification of tariff headings for certain meat products which has increased duties to 40%, saying this “could be detrimental and disastrous to the whole meat processing industry” as it would result in higher market prices of the commodities.
The request came following the issuance by the customs agency of Memorandum Order 2016-04-003 dated March 29 that amends a March 15 memorandum and changes the tariff heading for various pork, beef, and chicken products.
In separate statements to Tariff Commission chairman Edgardo Abon and Customs Commissioner Alberto Lina on April 6, PhilExport R3 president Crisanto Venzon said the March 29 memo levies a 40% duty on frozen pork cutting fat, frozen pork cutting fat skinless, and frozen pork ham fat, among others, compared with only 5% imposed by the March 15 order.
In the letter to Lina, Venzon said that one of PhilExport R3’s member companies, a big Pampanga-based meat product manufacturer, has been affected by the new memo, since it has four containers currently at the port that arrived April 3 and 4, for scheduled pullout on April 6.
“These shipments are being held pending the payment of the 35% (added) tariff,” Venzon said. He explained that the company had already paid the 5% when it applied for a sanitary and phytosanitary (SPS) permit last February 9 for the three containers and on February 17 for the fourth container.
“The 5% was the prevailing rate at the Tariff Heading of 0209.1000 before they were reclassified to 0203.2900 per the Memorandum of March 29, 2016,” Venzon stated.
Moreover, Venzon noted that while the March 29 memorandum prescribes immediate compliance, “it did not state which shipments the new tariff rates will be collected from—will this already include those with SPS approval before the memorandum or those with SPS approval after the memorandum?”
The export official is now requesting the customs agency to reconsider the reclassification of these products from 0209.1000 to 0203.2900 that had led to an increase in the tariff rate from 5% to 40%.
The group also requested that government agencies consult with stakeholders and key players before any reclassification is implemented.
“The increase in tariff rate could be detrimental and disastrous to the whole meat processing industry as this will redound to an increase in their cost of operations and products pricing,” Venzon said.
According to the affected Pampanga meat product importer, the landed cost of its food product is P33.59 per kilo at 5% duty, but will rise to P53.59 per kilo at 40% duty.
For one container with 25,000 kilos of meat, additional taxes to be paid per container will be P500,000, and when multiplied by roughly eight containers per month, will amount to P4 million per month added to operational costs. This translates to P48 million in additional taxes annually.
PhilExport R3 also suggested that BOC “reconsider the retroactive application of the new tariff duties to shipments with approved SPS before the issuance of the Memorandum.” It also sought a similar clarification on the re-classification from the Tariff Commission.
Moreover, Venzon asked BOC to immediately implement a moratorium of at least three months so the bureau can speak with key players and evaluate the impact of the memorandum on the meat processing industry.
“PhilExport and the Bureau of Customs have a long standing partnership in trade facilitation and we laud the support that you have and are extending to the export and import industry. Our common goal to assist our industry players cannot be underemphasized at this point as we will not be able to do our business efficiently without your agency’s collaboration,” Venzon said. – Roumina Pablo
Image courtesy of Stuart Miles at FreeDigitalPhotos.net
