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Bacolod City, Philippines Monday, April 6, 2015
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Legal remedies eyed
vs. latest BIR rulings

Sugar industry leaders alarmed by revenue regulations issued by the Bureau of Internal Revenue a day before the Holy Week break, yesterday said they are studying legal remedies to protect the rights of farmers.

BIR Revenue Regulation 6-2015 dated March 31 approved by Finance Secretary Cesar Purisima on recommendation of Commissioner Kim Henares sets the implementing regulations for imposing advance Value Added Tax on sugar.

It states that covered by VAT are refined and raw sugar.

Under 6-2015, only raw cane sugar such as muscovado are exempt from VAT.

“We were greatly surprised by these latest revenue regulations which were issued a day before the Holy Week break. It appears that BIR is making its own interpretation of the law on the definitions of refined sugar, raw sugar and raw cane sugar,” Enrique Rojas, president of the National Federation of Sugarcane Planters, said.

Worse, the sugar industry was not consulted and the BIR did not conduct a public hearing when it took upon itself the power to interpret the law passed by Congress, he said.

“Definitely, we in the Sugar Alliance will meet and discuss how we can rectify these wrongs committed by BIR against the industry. We will also seriously study the possible legal remedies available to us to protect the rights of our farmers, particularly the thousands of small sugar farmers,” Rojas said.

Since the Sugarcane Act was already enacted into law, we hope that its provisions will help address these erroneous interpretations of BIR and remove this additional burden on our farmers, he added.

“Our stand is the same, raw is exempt from VAT,” Manuel Lamata, United Sugar Producers' Federation of the Philippines president, said.

This is explained in the Sugarcane Industry Development Act signed by President Benigno Aquino III into law on March 27, he said.

“It is unfortunate that Commissioner Henares is ill advised,” Lamata added.

The BIR also issued RR 7-2015, also dated March 31, that amends RR 11-2014 relative to the one percent income payment on locally produced raw sugar.

In RR 7-2015, the BIR simplified the rules of registration and bookkeeping of sugar farmers whose gross receipts for the year do not exceed P300,000.

These farmers will be exempted from the payment of registration fees with the BIR upon submission of their sworn statements of income for the year and National Statistics Office certified birth certificate.

They will also be exempted from compliance with the issuance of registered receipts or sales invoices, from the requirement of maintenance of books of accounts, and from attaching financial statements of account information forms to the filed income tax return.

They will be exempted from filing monthly percentage tax, but must file annual income tax returns, RR 7-2015 said.*CPG



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