Government Revenue Loss Amounted to ₱45 Billion due to Palm Oil Smuggling, Says DA

On Thursday, Agriculture Undersecretary Fermin Adriano announced that the Department of Agriculture (DA) has launched a probe into “the alleged smuggling of palm oil as animal feeds but is processed as cooking oil for human consumption as early as last year.” The issue was earlier raised by the House committee on ways and means chairman Representative Joey Salceda during a panel hearing.

According to Salceda, the misdeclaration of palm oil as animal feeds worth ₱300 billion had resulted in a ₱45-billion revenue loss for the government as it is subject to be levied with a 15% duty. Adriano furthered that zero tariffs are imposed on imported palm oil to be processed as animal feed and a 12% value-added tax is not imposed, particularly because the product does not fall under such classification.

“BAI’s [Bureau of Animal Industries] data on volume certified is much higher than those in the accounts of BOC [Bureau of Customs]. The entry of palm oil has been ongoing since 2016, as per the data traced by ARTA [Anti-Red Tape Authority],” explained the DA official, citing the apparent discrepancy between the two agencies.

In 2016, BAI recorded an import volume of 2.421 million kilograms which did not align with the BOC’s data of 1.181 million kilograms. The inconsistencies remained in 2020 when the BOC reported peak imports at 55.488 million kilograms, while BAI data reached 40.632 million kilograms.

“As DA has no police power to apprehend and prosecute suspected smugglers, it sought the assistance of the Anti-Red Tape Authority, which conducted an investigation in January 2022,” Adriano elaborated. “ARTA submitted its report to Agriculture Secretary William Dar on February 7, 2022.”

ARTA has, likewise, suggested “the Department of Agriculture to conduct its own investigation on the discrepancy reported from the data from BOC and BAI in relation to the record on importations with VAT exemption vis a vis BOC’s actual arrival of goods. Pending such investigation, the responsible officer will be placed under preventive suspension to preserve the integrity of the evidence.”

Adriano has since affirmed that “Agriculture Secretary Dar has already formed an investigation committee to look into the matter.” The Food and Drug Administration (FDA) had previously been tasked by the Bureau of Internal Revenue to certify that the imported palm oil is unfit for human consumption, under the latter’s Revenue Memorandum Circular (BIR-RMC). “This authority was recently transferred to the Bureau of Animal Industry (BAI) only last September 6, 2021, through RMC 100-2021 of the BIR,” added Adriano.

Source: GMA News