The Bureau of Customs (BoC) expects to collect up to P2.4 billion worth of tax deficiencies from cooperatives found to have undervalued their rice imports in 2019 and 2020, the Department of Finance (DoF) said in a statement Friday.

Citing a report from the bureau, the DoF said P1.4 billion worth of underpaid taxes will be collected from 48 cooperatives after a post-clearance audit of rice imports in 2019. The corresponding amount from audits this year is P1 billion.

“They have been issued audit notices and subsequent demand letters for the payment of additional duties and taxes as a result of the under declarations (of their imports),” Customs Commissioner Rey Leonardo B. Guerrero said at a DoF Executive Committee (Execom) meeting.

Mr. Guerrero said the demand letters have been contested by a number of importers.

Last month, Finance Secretary Carlos G. Dominguez III told the BoC and the Bureau of Internal Revenue to help the Agriculture department investigate the alleged use by private rice traders of cooperatives as dummies to avoid taxes.

Agriculture Secretary William D. Dar, in Administrative Order (AO) No. 34, suspended the issuance of permits and the application process for sanitary and phytosanitary import clearances (SPSICs) to farmers’ cooperatives and irrigators’ associations.

As of October, the government collected P14.31 billion in tariffs from rice imports. Of these collections, the government must provide P10 billion a year to support the Rice Competitiveness Enhancement Fund (RCEF).

Cooperatives are not exempt from paying duties on rice imports but some are registered with the BIR for income tax exemptions on their activities, according to Finance Undersecretary Antonette C. Tionko. — Beatrice M. Laforga