Tax-free farm import sought

By Donna G. Brazas, Reporter
Source: Manila Times

The duty-free privileges given to the importation of farm and fishery inputs are essential to sustaining investments in the agriculture sector, Agriculture Secretary Leonardo Montemayor said yesterday.

This was stressed by Montemayor in supportsof  a congressional bill seeking to extend the duty-free privileges on the importation of farm and fishery inputs to 10 years, from the implementation of the Agriculture and Fisheries Modernization Act (AFMA) in 1997.

The House Bill 4379, introduced by Rep. Cynthia Villar, will complement other proposed bills filed in Congress aimed at exempting all types of agriculture and fisheries inputs, equipment and machinery that would have great impact on agriculture and fisheries sector.

Montemayor said the agriculture department, as mandated under the Agriculture and Fisheries Modernization Act or Republic Act 8435 and the Fisheries Code or RA 8550, has been providing duty-free privileges for the importation of agriculture and fishery inputs for agriculture and fishery enterprises since 1997.

According to the DA chief, the Department of Finance (DOF) estimates the total foregone revenues from this duty-free privileges at P39.11 million, P439.44 million, and P627.55 million in 1999, 2000, and 2001, respectively or a total of P1.106 billion.

He said extending the duty-free privileges to 10 years would therefore be a “welcome development for the agricultures sector.”

The DA chief, however, expressed reservation on a particular provision in HB 4379 that reads “individuals, cooperatives and other enterprises, engaged in the importation of all types of agriculture and fisheries inputs, equipment, and machinery be exempted from duty privilege.”

“We believe that beneficiaries of the duty-free privilege should be limited to agriculture and fisheries enterprises. Apart from providing relief to these sectors, providing the duty-free privilege solely to the agriculture sector will serve as an incentive for investments to be put in agriculture. This will also minimize the revenue implications of providing such duty-free privileges,” he added.

Montemayor also recommended the adoption of a provision in the bill that would allow for the implementation of guidelines as safeguard similar to executive order number 133 which implements section 109 of AFMA.

He said the DA would like to recommend that HB 4379 also include a provision or mechanism that would clearly define agriculture and fishery inputs.

“This will safeguard domestic produ­cers of basic primary agriculture whose products serves as inputs to the agriculture and fisheries sectors. Such a law could likewise provide for the formation of an inter-agency committee with the technical capability of defining the co­vered products in the bills to undertake this mandate,” he said.