IF industrial beverage makers fail to get sugar for their operations, the government could lose as much as P2.5 billion per month in taxes from sweetened beverages under Republic Act 10963 or the TRAIN Law, according to the chairman of the House Committee on Ways and Means.
With this, Albay Rep. Joey Sarte Salceda suggested that industrial users be allowed to import at least 200,000 metric tons more of refined sugar, “at more realistic schedules.”
“Jobs are on the line. Taxes are on the line. Growth is on the line, if industrial users are unable to get their sugar. Consumers can shift from refined to raw sugar, or even shift preferences altogether to other alternatives. But industrial users always need high-grade refined sugar,” Salceda said on Tuesday.
From 21 days’ worth of inventory, the economist-lawmaker said beverage makers only have around four days’ worth of inventory at a time.
“They usually operate at 21 days’ worth of inventory. If they are unable to procure sugar from the 150,000 MT sugar import order of the SRA, we’re going to see more work stoppages. Beverage plants can only produce their zero-sugar or ‘diet’ varieties. That doesn’t account for much of the demand,” Salceda added.
Salceda explained that his committee was expecting P37 billion in sweetened beverage taxes if the sugar crisis had not hit.
He said that as restaurants begin to reopen more widely, and as the economy returns to a greater sense of normalcy, demand for sweetened beverages is growing.
Companies, however, are at serious risk of being completely unable to meet demand because they cannot import directly and are forced to make do with “whatever amount of refined sugar they can get from traders,” he said.
“They have to make do with volumes like 9,000 MT from individual traders. That may sound like a lot. But that’s one or two days of peak production at these beverage makers,” he added.
Salceda also took to task the Sugar Regulatory Administration’s “pro-rated” system of allocating sugar import orders.
“Pro-rated based on what, exactly? I was not able to get an answer to this when the Committee on Agriculture and Food held hearings on the sugar issue,” added Salceda, who is also vice chairman of the agriculture and food committee.
Earlier this month, the SRA had to amend its sugar import order to allow late arrivals of imports to come in.
“The SRA issues an import order, allocated to some random set of traders, and then it sets a deadline, so all the sugar has to arrive all at once. That further increases prices of sugar, because then we have to take care of so much warehousing,” he said.
“Here’s my proposal, which the House Committee on Ways and Means will forward at the appropriate time: Make import allocations pro-rated based on excise tax payments, so that we have some empirical basis for the allocation. It’s also an incentive for bottler companies to pay their taxes right. If you don’t pay your taxes right, you don’t get enough sugar,” the solon added.
The lawmaker said reliable and cheap sugar supply is the future of the country’s food and agriculture processing sector.
“And then we set the arrival schedule more realistically, say every month or every quarter, rather than all at once, so our industrial users don’t have to shoulder unnecessary warehousing costs due to the imports having to arrive all at once,” he said.
“If you don’t have cheap sugar, you won’t have a big food processing sector. We’ll be forced to import products with sugar anyway, like we do 3-in-1 coffee. And they won’t produce jobs here. We won’t produce value-added for farmers. Being import-averse is the worst option in this case,” he added.
Image credits: Nonie Reyes
₧2.5-B sweetened beveragetaxes at risk from sugar lack
Source: News Paper Radio
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