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Wednesday, July 27, 2005
Temporary increase in tariff okay- traders
The proposed one percent across-the-board hike in import duties is acceptable, but only as a temporary measure while the implementation of the expanded value-added tax (e-VAT) law is suspended.
That’s what some Cebu business leaders said after the government announced last week that it would impose tariff hikes to make up for the P130 million in losses it has been incurring daily since the Supreme Court’s July 1 temporary restraining order (TRO) on the implementation of the e-VAT law.
“The one percent hike might increase the prices of goods affected by the hike.
But the TRO on the e-VAT is devastating to our ratings for the Philippines. I agree to the proposed import hike but only as an alternative (while) the TRO on the e-VAT (is in effect). It’s another revenue generating device,” Eric Mendoza, president of the Mandaue Chamber of Commerce and Industry, said in an interview.
The one percent increase in import duties is estimated to generate P14.6 billion a year.
Cebu Chamber of Commerce and Industry president Robert Go also said a slight increase in prices is likely to occur but he sees no major adverse effects.
He added that if the proposed tariff hike is meant to boost revenue collection to aid the Philippine economy, then it is acceptable.
Carlos Co, Philippine Chamber of Commerce and Industry vice president-Visayas, also gave his nod to the tariff hike.
“But once the e-VAT law is approved, then the one percent increase should be rolled back,” he said.
Other quarters were less receptive to the tariff hike plan.
Minerva Yuvienco, president of the Cebu Garment Industry Association, in consultation with the Confederation of Philippine Exporters Foundation (Cebu) Inc., said: “Exporters who use imported raw materials and are using a customs bonded warehouse will not be affected by this additional tax because these exporters will not be paying it (tariff) in the first place. But for exporters who import their raw materials but do not use a customs bonded warehouse, their finished goods will naturally become more expensive.”
For all importers of goods for distribution locally, the result will be more expensive imported goods, she added.
A week after making the proposal, the Department of Finance is now rethinking and reviewing its plan to impose the one percent across-the-board increase in import duties.
Finance Secretary Margarito Teves said the government would study all its commitments to multilateral trading organizations such as the World Trade Organization (WTO) and the Association of Southeast Asian Nations.
The WTO allows member countries to raise import duties as long as the increases do not exceed the bound rates committed to the multilateral trading body. (ALC/(with Manila Standard Today)
(July 27, 2005 issue)
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