‘Gov’t lost P15.1 B due to tax exemptions to importers’

MANILA, Philippines - The government lost more than P15.1 billion in revenues due to questionable grant of tax exemptions to private importers of rice, sugar and corn from 2008 to 2012, a Commission on Audit (COA) report released Wednesday showed.

In its report, COA insisted the amount should be collected, saying the exemptions were contrary to the rules and regulations under the Tariffs and Customs Code of the Philippines (TCCP).

Records show that duty or tax exemptions granted to private rice, sugar and corn importers were biggest in 2010 totaling P5.571 billion, followed by P4.595 billion in 2012.

The COA report said such perks granted to the private sector through the National Food Authority (NFA) by the Fiscal Incentives Review Board (FIRB) had drastically cut Bureau of Customs (BOC)  collections by more than P16 billion during the six-year period.

State auditors noted that items or products covered by exemptions under the TCCP rules do not include importation of rice, sugar and corn.

COA cited Executive Order 93 issued in 1986 withdrawing certain tax and duty incentives granted to government and private entities.

State auditors said they were told that it was the NFA that approved the participation of private sector importers of rice, corn and sugar.

The BOC pointed out that from 2006 to 2008, it was the private importers who imported rice. Later, the NFA made the importation for the private sector. The NFA paid the Tax Expenditure Fund or government subsidy to BOC and subsequently collected service fees from the private entities.

The COA report said the granting of duty exemption privileges to the private sector through NFA must be stopped, stressing that other forms of assistance would be more appropriate.

Probe pushed

The Volunteers Against Crime and Corruption (VACC), for its part, has joined calls for an investigation into alleged anomaly in NFA’s rice importation as it urged concerned agencies to end the “hullabaloo over a certain David Tan.” – With Edith Regalado, Eva Visperas, Edu Punay