DA urged to review tax-free importation of palm oil

THE FEDERATION of Philippine Industries (FPI) urged the government to review its policy of allowing the tax-free importation of palm oil, citing the adverse impact on the domestic coconut industry.

“The Department of Agriculture (DA) should also revisit this policy of allowing zero value-added tax (VAT) and duty-free importations of palm olein as this is clearly hurting the local coconut and palm oil farmers and producers,” FPI Chairman Jesus L. Arranza said during a press conference in Makati City on Tuesday. 

Mr. Arranza, also the president of the Coconut Oil Refiners Association, said the government should strictly validate the reasons given for palm oil imports and monitor how these are actually used.

He said he sent a Feb. 8 letter to President Ferdinand R. Marcos, Jr., who is also the Agriculture secretary, asking him to order DA to conduct a dialogue with local coconut industry stakeholders regarding the issue.

Mr. Arranza said he also asked Mr. Marcos to secure documents that could help the government in tracking traders who had duty- and tax-free privilege from the Bureau of Animal Industry (BAI), but used the imports outside of its purpose of compounding of animal feeds.

He noted some of the imported palm olein have ended up in the market as cooking oil or were given to biodiesel producers as replacement to coconut oil.

Under Department of Energy rules, only coconut oil is allowed as the blending agent in biofuel.

“The problem is the apparent laxity on the part of the BAI in issuing requests to import palm olein on VAT and duty-free basis,” Mr. Arranza said.

He added that the FPI and other industry groups are ready to assist the DA in launching an investigation into this issue.

Mr. Arranza said the DA and the BAI should ramp up efforts to monitor the palm oil imports entering the country. 

He said the investigation should take a close look at the BAI to prove that the palm oil imports were actually used for feeds compounding.

“If not, they should be put behind bars because they are killing the coconut industry and stealing money from the government,” Mr. Arranza said.

“There is no closure yet on this issue; we opened it and we have to close it fairly, expeditiously, and ferret out all illicit acts attendant to this issue, otherwise there’ll be room for other interpretation,” he added. — Revin Mikhael D. Ochave