A lawmaker claims that a syndicate led by Chinese nationals is behind the smuggling of agricultural products in the country, as he vowed to focus his panel’s oversight functions on cracking down on this “mafia.”
“There is Class A information from our various sources that this mafia is in control of agricultural smuggling in the country, at every stage of the smuggling process, from transport to arrival to import permits and sanitary inspection,” Albay Rep. Joey Salceda said in a statement on Saturday.
“Intelligence sources tell us that the main characters are Chinese, or their associates. The tentacles are all over, but I am told that it is a small group, so if we can get to the core group, we should be able to pin the system down,” he added.
In a separate statement also on Saturday, Salceda said the panel which he heads, the House ways and means committee, will “focus strongly” on helping the Marcos administration in its crackdown on smuggling.
“President Marcos wants to fight the double whammy of high domestic agri prices and high rates of agri smuggling which benefit only the smugglers. We join him in that fight,” the lawmaker said, as he noted his panel’s “oversight [on] the implementation of the [Department of Agriculture’s and Bureau of Customs’] task forces and regulations on agricultural smuggling.”
“You will remember that it was also the House ways and means committee that got these agencies to issue these tighter regulations [against smuggling] last year,” Salceda said.
“I will be asking an independent panel such as the Institute for Solidarity in Asia to see what changes we can further bring to the BOC to tighten agri smuggling enforcement,” he added.
Red, white onions
Among the products being smuggled into the country, red onions have had a more than three-fold increase in their prices compared with 2021. They are currently being sold to as high as P720 per kilo—making them more expensive than beef.
White onions have also had a surge in prices and have been scarce since July last year.
Salceda said the mafia has been “strangling the supply of imported agricultural products [and] “took stronger hold of our processes starting 2018, during a period of high food inflation.”
“They have people in the ships, the ports, the inspections, the quarantines, the warehouses, and the economic zones. It’s very pervasive,” he said further, as he vowed to have this matter investigated “from top to bottom, and from end to end.”
“Rice tariffication helped undercut their control significantly in the rice trade sector. But with high nontariff barriers in other areas, especially in the issuance of sanitary and phytosanitary import clearances and other administrative requirements, the system is susceptible to abuse and capture,” Salceda said.
He said the panel will coordinate with other agencies to expose this syndicate.
“Sunlight is the best disinfectant, so a system that is publicly available, and allows us to monitor major shipments in real time should help curtail smuggling and abuse of the imports processes,” he said.
He added: “We are studying how process and rules changes can fight agricultural smuggling. That’s part of our policymaking function. But we hope to pin down the agricultural smuggling mafia so that we can close the opportunities for their ways.”
Taxation priorities
Salceda also on Saturday identified “10 priorities” that the ways and means committee aims to tackle this year.
The tax panel has House jurisdiction over the government’s financial matters, including taxation, revenues and borrowing.
Apart from the drive against smuggling, the committee will follow up on its request to the DOF (Department of Finance) to resolve the policy on the value-added tax (VAT) for indirect exporters, Salceda said.
Third, the ways and means panel will “intervene” on behalf of business process outsourcing (BPO) companies that are transferring their registration from the Philippine Economic Zone Authority to the Board of Investments.
“This will protect the work-from-home arrangements of many BPO companies,” Salceda said.
‘Alcomixes,’ vapes, junk food
A fourth priority would be discussions on the “taxation of other alcohol products such as alcomixes or alcopops,” the committee chair said.
“I am not yet fixed on higher rates for alcohol across the board, but I definitely want alcomixes to be taxed in parity with beer,” Salceda said.
“They are consumed like beer, and they attract younger consumers. I want higher taxes there,” he added.
Fifth would be the report of the committee’s technical working group on taxing vapes.
“I think, for now, we will go for stronger enforcement against illicit trade since the bigger vape companies appear to be paying the taxes we projected we will get from them,” Salceda said.
Sixth, proposals on the motor vehicles road users’ tax will be considered, “depending on inflation conditions,” he said.
Seventh, the panel will begin “briefings on junk food taxes” and on whether the Department of Health, the Food and Drug Administration and the DOF could implement such taxes.
“Eight, I will request that the congressional oversight committee on the CTRP (Comprehensive Tax Reform Program) be convened,” Salceda said. “In particular, I want to see updates on the VAT refund system, electronic invoicing, challenges with the sweetened beverage taxes, and how we can help the domestic sugar industry.”
Ninth, the panel will tackle the global minimum corporate tax of 15 percent on big companies and its effect on the Philippine economy. According to the intergovernmental Organization of Economic Corporation and Development, 136 countries have so far approved that tax plan.
“Finally, I will be pushing for more capacity building in the [Bureau of Internal Revenue] with respect to transfer pricing—especially in excisable products such as oil and minerals. On the one hand, new taxes on these products might be good. But implementing current taxes faithfully is also a concern,” Salceda said. INQ
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