By Billy Begas
House Committee on Ways and Means chairperson Joey Salceda has proposed the removal of tax exemptions on palm oil being imported for animal feeds to reduce the room for technical smuggling.
Salceda said the tariff for palm oil to be used for animal feed is zero, while palm oil for human consumption is levied a 15% tariff.
The Department of Agriculture said smugglers are exploiting this policy and declare their imports as unfit for human consumption to avoid paying taxes.
“Why discriminate anyway. Let’s just equalize the tariffs, regardless of grade, since low-grade palm oil will probably be much cheaper anyway. That way, we don’t have room for technical smuggling,” Salceda said.
Salceda said imposing tax on palm oil will also encourage the livestock sector to shift for coconut oil, “which would be a boon for local coconut farmers.”
He pointed out that making the coconut sector competitive “is both a national priority and, frankly, one of the easier big goals for Philippine agriculture.”
“There are 3.5 million coconut farmers in the country. We also have a new source of funding for coconut industry development, through the Coco Levy Trust Fund Act. So, it makes sense to encourage people to shift to coconut oil, while closing the palm oil smuggling route,” Salceda explained.
Salceda also noted that the coconut sector is struggling due to low farm gate prices, the consistent need for resilient varieties, and climate change and infestation.
“So, creating demand for coconut products such as coconut oil would encourage more capital and investment into the coconut sector,” he added. “By closing the smuggling loophole, we also create more revenues which the government can invest in agriculture. Only the smugglers lose here.”
