DTI shelves bid to impose 5% import tariff
The Department of Trade and Industry (DTI) has dropped an initial plan to slap a 5-percent tax on all imported products, which was intended to raise money to help the country cope with the health crisis.
The tariff would have been applied across the board, even on products that currently enter the country either at lower tariff or duty free because of existing agreements made with trading partners of the Philippines.
It could have raised P245 billion, according to the Board of Investments, the investment promotion agency of the DTI, basing the estimate on the average import figures from 2016 to 2018.
However, on Monday, Trade Undersecretary and BOI Managing Head Ceferino Rodolfo said plan has been dropped so that the government could further study the possible consequences.
“We abandoned that for the moment already,” Rodolfo said in a viber message, referring to the proposed tariff. He said this was decided last Friday, during a meeting with the Technical Committee on Tariff Related Matters.
“We need to study the cost-benefit carefully. [For example, the] impact on costs for businesses and inflation for consumers [against the] revenue to be generated for the [COVID-19] fight,” he said.
Trade and Industry Secretary Ramon Lopez had first briefly mentioned the plan during a television interview on May 19, wherein he said the DTI was considering to slap a small tariff on all products to help raise revenues without being protectionist.
Before the plan was shelved last week, Rodolfo told reporters that an across-the-board tariff would have prevented the Philippines from being accused of protectionism, since no specific product would be spared.
Moreover, a 5-percent tariff would have also prevented the increase from being inflationary, he said.
The increase, Rodolfo said, would have been justified under the current health crisis. Other countries, he said, have already banned exporting products critical to COVID-19 response efforts. In the Philippines, it would not be a ban, but a tariff increase.
This is not to say the government has not increased tariffs for COVID-19-related funds. Under Executive Order No. 113 signed on May 2, an additional but temporary 10-percent import duty has been slapped on crude oil and refined petroleum products. INQ
