House body questions six-centavo fee being collected by PCA

November 8, 2011 11:14 pm 

By Lilybeth G. Ison

MANILA, Nov. 8 — The committee on ways and means of the House of Representatives will conduct a motu propio investigation on the basis of the six-centavo fee being collected by the Philippine Coconut Authority (PCA) on coconut products and by-products.

In a recent hearing presided by Oriental Mindoro Rep. Reynaldo Umali, committee vice chairman, panel members questioned the legality of the six-centavo fee, which cropped up during discussions on the tax provisions of bills seeking to revitalize the coconut industry.

Cagayan de Oro City Rep. Rufus Rodriguez asked PCA administrator Euclides Forbes if the agency is still collecting coconut levy.

Forbes replied the PCA no longer collects coconut levy but the agency collects six centavos per kilo of processed copra from millers.

He said the collection is used by PCA to augment its annual budget from the government.

According to PCA deputy administrator Arturo Liquete, the six-centavo fee is assessed and collected on purchases and deliveries of copra or husk nuts, fresh coconut, and matured nuts which are being bought by oil millers, exporters and other end-users.

"The fee is not collected from farmers. It is collected from the processors and manufacturers of coconut products," he said.

Liquete said the six centavos serve as "Statutory Support Fund" of the PCA.

He explained the fund started during the PhilCoA (Philippine Coconut Authority) years in 1954 and this was upgraded to three centavos per kilo of coconut product by virtue of Presidential Decree 1854.

Under the new Administrative Code, Liquete said all agencies were able to upgrade fees they were collecting, "so the amount was upgraded to six centavos then nine centavos.

The present PCA Governing Board upgraded it to 12 centavos per kilo of copra but this has not yet been implemented because of opposition from the private sector, he said.

"So the PCA fee and levy are entirely different things. As far as our operations would say, we are operating on the basis of our corporate income coming from this fee we are collecting on the basis of PD 1854. We use our fee collection exclusively for the operations of the PCA which include personnel and MOOE expenditures," he said.

Liquete said the old coconut levy was imposed pursuant to several presidential decrees starting in 1973 with PD 276 and gradually the levy evolved into a higher amount pursuant to PD 906 and PD 1463.

"These provided basis for the collection of the levy for the Coconut Stabilization Fund. The levy was eventually abolished in 1983. It is the controversial levy (currently being) litigated in court," he said.

Northern Samar Rep. Emil Ong, however, said the Constitution explicitly provides that no taxes can be collected from agricultural products.

"For administrative purposes, fee collection could be allowed. We have to distinguish between taxation and administrative fee. If that is charged per kilo of coconut product then that is taxation. It is also baloney to say the collection is not a burden to farmers because the fee can easily be passed on to farmers by the processor, copra buyer and copra oil mill owner," he said.

Ong said he had a case before which was filed after martial law wherein he questioned the imposition of 10-centavo per kilo on the buyer. The Supreme Court sustained him on the issue.

"It is still a precedent. So definitely, on taxes on agricultural products, these can’t be allowed," he said.

When asked by Rodriguez how much was the fee collection of the PCA for the past three years, Forbes said on a yearly basis, the collection could amount from P150 million to P270 million.

Umali said the PCA should look into the matter as it could be a brewing issue because of jurisprudence on the matter, citing the SC decision on Rep. Ong’s case before.

"If this is again questioned, then how will you pay back and cover the amounts you're now using to augment funds provided in the General Appropriations Act?" he said.

As part of the inquiry, Umali said the committee will request the Department of Justice (DoJ) to make an opinion on the fee collection issue and for the Bureau of Internal Revenue (BIR) to comment if it is a form of taxation or fee as interpreted by the PCA.

Surigao del Norte Rep. Francisco Matugas said the committee will invite farmers groups and producers to give their views on the matter. (PNA)

DCT/LGI

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