DA probing palm oil smuggling

The Department of Agriculture (DA) said Thursday it has been investigating the alleged smuggling of palm oil, an issue raised by House committee on ways and means chairman Representative Joey Salceda.

In a statement, Agriculture Undersecretary Fermin Adriano said that the DA has been “investigating the alleged smuggling of palm oil as animal feeds but is processed as cooking oil for human consumption as early as last year.”

This, after Salceda, in a House panel hearing, alleged that the government’s revenue loss amounted to P45 billion resulting from the misdeclaration of palm oil as animal feeds worth P300 billion, which is supposed to be levied with a 15% duty.

The DA official said that imported palm oil to be processed as animal feed is imposed zero tariff and is not classified as a product to be imposed a 12% value-added tax.

Adriano noted the discrepancy in the volume of palm oil as animal feeds certified by Bureau of Animal Industries (BA) compared to those allowed to enter by the Bureau of Customs (BOC). 

“BAI’s data on volume certified is much higher than those in the accounts of BOC. The entry of palm oil has been ongoing since 2016, as per the data traced by ARTA [Anti-Red Tape Authority],” he said. 

In particular, in 2016, registered imports were at 1.181 million kilograms as per BOC data. 

In contrast, BAI data recorded an import volume of 2.421 million kilograms.

Imports peaked at 55.488 million kilograms in 2020 per BOC data, but BAI data showed imports reaching 40.632 million kilograms, Adriano said.

“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 said.

“ARTA submitted its report to Agriculture Secretary William Dar on February 7, 2022,” he added.

Adriano said that ARTA’s major recommendation is for “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”.

“Agriculture Secretary Dar has already formed an investigation committee to look into the matter,” he said.

He added that ARTA’s report also showed that the Bureau of Internal Revenue’s Revenue Memorandum Circular (BIR-RMC) tasked the Food and Drug Administration (FDA) to certify that the imported palm oil is unfit for human consumption, as part of the requirements for VAT exemption. 

“This authority was recently transferred to the Bureau of Animal Industry (BAI) only last September 6, 2021 through RMC 100-2021 of the BIR,” he said. — BM, GMA News