With the anti-dumping duty now in place, local flour millers on Thursday warned the Bureau of Customs to be on the lookout for smuggled flour.
Ricardo Pinca, executive director of the Philippine Association of Flour Millers (PAFMIL), said that“whenever a commodity comes with a high import duty, unscrupulous traders usually resort to technical smuggling to escape paying the mandated dues,” Pinca said.
“Technical smuggling may come in the form of misdeclaration or misclassification or declaring the flour as another item of lower or no import duty at all such as soybean meal which may also come in bags, just like Turkish flour,” he added.
The PAFMIL official said that another way is to declare a lower transaction value, so that lower duties would be imposed; or declaring a lower tonnage of import, which would mean paying lower taxes than required.
The Department of Agriculture (DA) imposed a dumping duty on Turkish wheat flour exports to the Philippines early this week after it found that the commodity was being exported to the Philippines at dumping prices.
It took the DA nearly a year of investigation before it came out with the decision.
The dumping duty, which will be in addition to the seven percent regular import duty on flour, is as high as 21.79 percent on hard flour for bread, 39.26 percent on biscuit flour and 35.21 percent on soft flour which is used for pastries and cookies.
Pinca welcomed the DA decision saying the dumping duty would make Philippine flour competitive in price against the dumped and subsidized competition.
A dumping duty is imposed on a commodity if it is exported at prices lower than its commercial price in the country of origin. The dumping duty is equal to the price difference between the domestic price and the export price.
“With fair competition, local industries would have a level playing field within which to push their products without being disadvantaged by subsidized, lower priced competition,” he said.