NOV.

8, 2011 DATE

NR # 2581B
REF. NO.

House panel to probe 6-centavo fee being collected by the PCA

The House Committee on Ways and Means will conduct a motu proprio investigation on the basis of the 6-centavo fee being collected by the Philippine Coconut Authority on coconut products and by-products. In a recent hearing presided by Rep. Reynaldo Umali (2nd District, Oriental Mindoro), a committee vice chairman, panel members batted for the inquiry to determine the legality of the 6-centavo fee. The issue on the 6-centavo collection cropped up during discussions on the tax provisions of bills seeking to revitalize the coconut industry. Rep. Rufus Rodriguez (2 nd District, Cagayan de Oro City) asked PCA administrator Euclides Forbes if the agency is still collecting coconut levy. Forbes said the PCA no longer collects coconut levy but the agency collects 6 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 6-centavo PCA fee is assessed and collected on purchases and deliveries of copra or husk nuts, or fresh coconut, 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. Liquete said the 6 centavos serve as Statutory Support Fund of the PCA. The fund started during the Philcoa years starting around 1954 and this was upgraded to 3 centavos per kilo of coconut product by virtue of PD 1854. Under the new Administrative Code, Liquete said all agencies were also to upgrade fees they were collecting. So the amount was upgraded to 6 centavos then 9 centavos at present, the Governing Board of PCA upgraded it to 12 centavos per kilo of copra. This latest upgrading, however, has not yet been implemented because of opposition from the private sector. 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. He 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.

NOV. 8, 2011 DATE

NR # 2581B
REF. NO.

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 litigated in court, he said. Rep. Emil Ong (2nd District, Northern Samar) 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. Ong said he had a case before which was filed after martial law wherein he questioned the imposition of 10-centavos 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 cant be allowed. 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 a matter as it could be a brewing issue because of jurisprudence on the matter, citing the SC decision on Rep. Ongs case before. If this is again questioned, then how will you pay back and cover the amounts youre now using to augment funds provided in the General Appropriations Act? As part of the inquiry, Umali said the committee will request the Department of Justice to make an opinion on the fee collection issue and for the Bureau of Internal Revenue to comment if it is a form of taxation or fee as interpreted by the PCA. Rep. Francisco Matugas (1st District, Surigao del Norte) said the committee will invite farmers groups and producers to give their views on the matter. (30) rbb