Leaders warn of shortage
The Sugar Regulatory Administration (SRA) on Friday warned that problems in implementing a new tax on the sale of sugar may limit domestic supply and delay export commitments.
From the start of the year, sugar millers must withhold one percent of the value of sugar they buy. The problem is that sellers like ordinary farmers do not have proper papers, receipts and tax numbers needed to withhold the tax.
SRA Administrator Ma. Regina Bautista-Martin said that the agency is alarmed that an increasing number of millers in Negros, which accounts of 60 percent of the country’s total production, has been unable to offload sugar.
“I was bombarded with so many texts. Planters associations in Victorias Milling Co., the largest sugar mill and refinery in Negros, are complaining that there are no buyers for their sugar,” Martin said in a telephone interview.
Atty. Jesus Barrera, the millers’ representative to the Philippine Sugar Board, said that non-withdrawal of sugar from the mills may result in a tighter supply of sugar in the domestic market, or higher prices.
“There were two biddings slated last week. The problem is that we don’t have bidders. Traders don’t want to buy sugar until planters satisfy the requirements of the BIR on the 1-percent withholding tax,” Barrera said.
The official also warned that the Philippines might fail to meet its export commitments, particularly to Washington.
“Traders have already signified that they may miss the March 15 deadline for our sugar exports to the US. We’re supposed to ship 36,000 to 38,000 metric tons,” Barrera said, noting that the new date was the second deadline for the shipment.
“If we missed the second deadline, we would have to move the timetable for the remaining sugar quota volume allotted to the US,” he added.
The Philippines has a regular US sugar quota of 138,827 metric tons (MT). Local traders prefer to export their sugar to Washington because they enjoy higher prices.
“Failure to fill up the entire US requirement would leave a negative impression. Worse, Washington may hold it against us, and may reduce our sugar export allocation in the following years,” he said.
Under the new BIR rules, proprietors or operators of sugar mills/refineries and direct buyers of quedans, or molasses storage certificates from the sugar planters on locally produced raw sugar and molasses, shall withhold the creditable income tax and remit the same to the BIR based on the applicable base price of P1,000 per 50-kilogram bag and P4,000 per metric tons, respectively.
The BIR regional director, through the recommendation of the Revenue District Officer, who has jurisdiction over the physical location of the sugar mills and refineries, shall issue the authorization allowing the release of locally produced raw sugar/molasses to the proprietors or operators for further processing into refined sugar, consumption or other purposes.
But the authorization will only be issued when copies of proofs of payment of the creditable withholding tax have been submitted and attached to the written request.
Sugarcane farmers, however, are complaining about the lack of coordination in its implementation, saying that the BIR regional office in Cebu has been requiring documentations outside the guidelines provided by its central office.
The SRA chief also noted that sugarcane farmers’ associations from Silay reported that agrarian reform beneficiaries and small planters could not sell their sugar because the BIR has been demanding official receipts from them.
“Even poor farmers who could hardly afford to buy enough food for their families are required to obtain official receipts. It’s an additional burden for them. Worse, the market will lack supply,” Martin said.
“Sugarcane farmers are having difficulty selling their produce since they are now required to issue ORs. We have to remember that these small farmers/holders, for so many years, don’t even have ITR or TIN numbers,” she added, referring to income tax return or tax identification number.