The country’s biggest group of sugar producers has expressed its support for the government’s plan to temporarily suspend the additional excise tax on fuel, but recommended that the second phase of the new tax reform be suspended entirely.
In a statement released Thursday, the Confederation of Sugar Producers’ Association Inc. (Confed) said it welcomed the recent announcement of the Department of Finance to suspend the additional increase in the excise tax on fuel for the first three months of 2019. However, the group said the suspension should go beyond the three-month reprieve in light of the country’s high inflation rate.
“While we are certainly grateful for this move, we hope that the DOF will continue suspending not just the excise tax on fuel but the implementation of the entire second phase of the Tax Reform for Acceleration and Inclusion (TRAIN) law,” the group said.
“With mechanization at the forefront of our program to enhance our global competitiveness, the imposition of excise tax has greatly increased our production cost. While mechanization’s intent is to lower our production cost, the same has not been achieved because of the implementation of the TRAIN law,” it added.
In sugar production, fuel is a primary component such that it affects the planting, harvesting and transporting of the commodity.
Confed accounts for more than 60 percent of farmers in the sugar industry.
In a separate statement, Emilio Yulo, who represents the planters in the Sugar Regulatory Administration (SRA), supported the call of the stakeholders and recommended that the suspension be extended for at least six months to a year, “or until the people fully recover from the effects of TRAIN 1.”
“Part of our mandate in SRA is to encourage mechanization of farms to make them more efficient and globally competitive. How can our sugar planters continue to compete when they have to contend with the high cost of fuel?” he said.
The TRAIN law seeks to increase the excise tax on fuel by P4.50 a liter in 2019 and P6 a liter by 2020, after it imposed an adjustment of P2.50 a liter this year. The additional excise tax was seen to have contributed to jacking up prices of basic goods and services in the market.