The chairman of the House Ways and Means Committee on Monday vowed to exert its pressure on implementing agencies to enforce excise taxes more strictly to curb smuggling and tax evasion.
Albay Rep. Joey Salceda made the commitment after the panel approved the committee report regarding the challenges in implementing the excise tax on sweetened beverages and the legislative intent on earmarking funds to sugar farmers.
“When we were raising new excise taxes from 2017 to 2019, we were told to just strengthen tax enforcement instead of passing new taxes. I said we can do both. The new taxes are here. It’s time to strengthen enforcement,” Salceda said.
He said the committee’s efforts to work with implementing agencies are already “bearing fruit,” citing that the Bureau of Internal Revenue (BIR) is now modifying its policies on cigarette export tax stamps to make the system less prone to evasion.
On abuse of freeport privileges for smuggling, he said the Department of Trade and Industry, Department of Finance, and the Philippine Economic Zone Authority are now working to strengthen law enforcement in the area.
He also noted that the Bureau of Customs is also strengthening enforcement on customs-bonded warehouses, the Food and Drug Administration (FDA) is procuring new machines to verify sugar content, and fuel-marking is now stronger with mechanisms to verify volume.
As for the excise tax on sweetened beverages, the committee found a significant deficit in the target tax revenues primarily due to an industry shift from the use of high-fructose corn syrup (HFCS).
However, verification of the shift cannot be ascertained due to lapses in tax administration and implementation.
The panel investigation also discovered that allocated tax revenues to fund programs for sugarcane farmers under the Sugarcane Industry Development Act (SIDA) was not properly implemented with the Department of Budget and Management citing the low absorptive capacity or capacity to use public funds of the Sugar Regulatory Administration (SRA) as a critical factor.
The committee has recommended the following points of action to improve revenue collection and administration: agency audits of the implementation of the sweetened beverage excise tax; validation of BIR beverage product registration and exemption; creation of a database of accurate import statistics of HFCS; and improvement of FDA product testing and implement FDA post-marketing surveillance.
Other recommendations include the amendment of the FDA mandate to include the evaluation of products; improvements in the absorptive capacity of the SRA to deliver programs to develop the sugar industry, and the submission by concerned agencies of periodic status reports to the Committee for proper monitoring of deliverables.