DOF probes sale of sugar import rights

The Department of Finance (DOF) is pushing for the review of the Sugar Regulatory Administration (SRA)’s policy which allows sugar farmers and planters’ associations to sell their import rights to traders.

During a recent DOF executive committee meeting, Finance Secretary Carlos Dominguez ordered the Bureau of Internal Revenue and Finance Undersecretary Gil Beltran to review the system of sugar importation and coordinate with SRA regarding possible reforms.

Under the current system of sugar importation, the SRA issues an allocation to farmers and planters associations, which in turn sell the rights to traders.

Dominguez said local sugar millers and planters which sell their importation rights should be taxed as they make profit from the transactions.

According to preliminary data gathered by the BIR, traders pay local millers and planters around P500 per bag of sugar in exchange for their importation rights.

As a result, Dominguez said the price of sugar remained high in the retail market.

“They (traders) are able to bring down the landed cost of sugar here by only a very small amount because there’s this fee that is paid,” Dominguez said.

During the same meeting, BIR deputy commissioner Arnel Guballe reported to Dominguez the creation of a task force which will monitor the local sugar inventory and validate the volume of imported sugar entering the country.

The creation of the task force on sugar came after Dominguez ordered the BIR to ensure that importers are paying the correct taxes.

“The task force on sugar is undertaking inventory stock-taking, validating the volume of imports based on allocations, and

ascertaining the payment of correct taxes by importers, local planters and millers,” Guballa said.

According to Internal Revenue commissioner Caesar Dulay, the task force would monitor importers, millers, planters, traders and dealers of refined sugar in the country.

He said the BIR sent a letter to the SRA last July requesting for the list of sugar importers.

The BIR was also able to gather an initial list of local sugar millers and planters, particularly those who have sold their import permits to other traders.