Farmers’ group proposes using higher MDM tax for COVID-19 vaccines

THE GOVERNMENT can tap revenues from the 40% tariff rate on mechanically deboned meat (MDM) imports to vaccinate the country’s agricultural workers against the coronavirus disease 2019 (COVID-19), a farmers’ group said.

In a statement, Samahang Industriya ng Agrikultura (SINAG) Chairman Rosendo O. So said the impact of the tax on consumers will be minimal while the benefit to the agricultural sector will be significant.

He cited that the proposed 40% tariff will mean just a P1.20 increase for every 350-gram can of luncheon meat currently priced at P78.85, or an additional 53 centavos for a 150-gram can of meat loaf.

MDM is used for the production of canned and processed meat products. “Shelling an additional P0.53 to vaccinate workers in the agriculture sector is a good start for our fight against this global pandemic,” Mr. So said.

SINAG recently said the Philippine government can earn up to P5 billion in additional revenues if it opts to implement a 40% tariff rate on MDM imports instead of the current 5%. In contrast, collection is estimated at around P635 million at the 5% tariff rate.

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The executive order that maintained the tariff at 5% expired on Dec. 31 last year, which means that it will return to 40% unless President Rodrigo R. Duterte signs a new order.

“MDM importation last year was (at) 254 million kilograms, at an average of P50 per kilogram. Reverting to the 5% tariff will deprive the government of much needed revenues,” SINAG said.

Last week, the Cabinet-level Committee on Tariff and Related Matters said it will pass a recommendation to Mr. Duterte to issue a new order that will retain the 5% tariff. “There is no need to increase the tariff to 40% because there (are) no local producers to protect,” Trade Secretary Ramon M. Lopez said on Jan. 4.

Based on data from the Philippine Statistics Authority (PSA), the agriculture sector employed around 9.70 million people in 2019 and accounted for 22.9% of the total labor force. — Revin Mikhael D. Ochave

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