Seaweed industry seeks removal of 1% agri tax

The struggling agriculture sector is seeking the removal of the recently reimposed one-percent agricultural tax.

About two weeks ago, the Bureau of Internal Revenue (BIR) imposed a one-percent tax that is  hurting the country’s seaweed industry, according to Seaweed Industry Association of the Philippines (SIAP) president Benson Dakay.

In a press conference, Dakay pointed out that the seaweed industry is already reeling from the strong peso which has cut into the earnings of exporters.

Because of the additional tax, the strong peso and low production, Dakay said the industry’s exports this year may reach only $95 million, just a little over half the original target of $165 million.

Dakay, who is also the president of Shemberg, Cebu’s leading carageenan manufacturer, said that because of the appreciation of the peso, Shemberg is likely  to lose around P200 million from its expected annual export of  $40 million.

An export of around $40 million, Dakay said, would previously have amounted to P1 billion.

Unfortunately, because of the appreciation of the peso, Shemberg’s export earning would likely dip to just P800 million, resulting in also of about P200 million.

The industry is also reeling from climate change which has raised seawater temperature to levels that are not conducive to seaweed growth. The current seaweed harvest, Dakay said, is lower and has a higher moisture content which most buyers do not like.

Thus, imposing a one-percent agricultural tax, Dakay warned, would be a double whammy for the seaweed industry which is facing several closures.

At least five carageenan manufacturers, Dakay reported, have already closed. These include Dahon Dagat which is owned by Dennis Tan; Hayco which is based in Cebu and King Agro which is based in Manila along with Dahon Dagat. Other firms such as Kerry Foods Philippines and Shemberg, Dakay said, are operating at just 50-percent capacity.