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THE
Seaweed Industry Association of the Philippines (SIAP)
will appeal to President Arroyo to reconsider the
government’s decision to strictly enforce an order
imposing a 1-percent withholding tax on sales made by
suppliers of agricultural products to large companies
and government agencies.
SIAP
president Benson Dakay said Revenue Memorandum Circular
(RMC) 44-2007 issued by the Bureau of Internal Revenues
(BIR) will bring seaweed processors “to their knees” as
the tax could jack up the cost of the raw materials they
use.
“The
1-percent tax would be a triple whammy for us who now
have to contend with low harvests of seaweed and lower
revenues because of the strong peso,” said Dakay.
The SIAP
is drafting a position paper for submission to the
President.
“The
government rationale is that it needs to collect more to
boost revenues. Why don’t they look at other sectors?”
he said.
BIR
officer in charge Lilian Hefti recently issued RMC
44-2007, which clarified the taxability of agricultural
suppliers in connection with sales made to top 10,000
corporations and to the government.
In its
circular, the bureau clarified that suppliers of farm
products are not exempt from the 1-percent withholding
tax on their sales to the government and those belonging
to the top 10,000 corporations.
The BIR
noted that suppliers of agricultural products have been
invoking Revenue Regulation 3-2004 to seek exemption
from withholding taxes on income payments from large
companies and government agencies.
The
bureau, however, explained that RR 3-2004 which it
issued on 2004 merely stated that sales made by
agricultural suppliers to companies not belonging to the
top 10,000 corporations are exempt from the 1-percent
withholding tax. |
