Galanto defends imposition of VAT on sugar coops

By Bobby J. Mahadali
Bureau of Internal Revenue Regional Director Rodita Galanto (l-r, sitting, center) with Atty. Aynie Mandajoyan, Assistant Regional Director (1st) and Atty. Nennette Epon, BIR Legal officer during the Committee hearing at the Sangguniang Panlalawigan yesterday.
Bureau of Internal Revenue Regional
Director Rodita Galanto (l-r, sitting,
center) with Atty. Aynie Mandajoyan,
Assistant Regional Director (1st) and
Atty. Nennette Epon, BIR Legal officer
during the Committee hearing at the
Sangguniang Panlalawigan yesterday.

BACOLOD CITY -- Amid mounting protests from sugar industry players, Bureau of Internal Revenue (BIR) Region 12 Regional Director Rodita Galanto explained in a hearing called by the Sangguniang Panlalawigan committee on agriculture that she merely performs her duty as a tax collector and not to quarrel with the sugar cooperatives.

Galanto with Atty. Aynie Mandajoyan, BIR Assistant Regional Director, and legal officer Atty. Nenette Epon bravely faced yesterday's hearing which was also attended by the sugar planters.

Galanto said that in less than a year of her appointment as BIR Regional Director, "I have been unjustly persecuted, wrongfully accused of several things, got death and bomb threats, and slammed via the media simply because I want to perform my duties as a tax collector which will in turn, benefit not only a few, but be enjoyed by all Negrenses."

"A year ago, when I was transferred here, I welcomed the idea of going back to my birthplace and be of service to my Kasimanwas. The first order of the day was for me to assess why RR-12 has fallen short of its collection at an average of almost P300 million a year in the last three years. Knowing all too well that the sugar industry propels the economy of this island, I focused my investigation on that sector and discovered that indeed, the law was not fully implemented or perhaps misinterpreted, allowing sugar cooperatives and other players of the industry to shortchange our government at an average of P500 million annually," Galanto said.

Galanto stressed that while it is true that under the law, cooperatives are exempted from taxes, this pertains to sale of raw sugar only but taxable on sale of refined sugar.

As per revenue regulation, P102 advanced Value Added Tax is imposed on a bag of refined sugar. With Negros producing an average of 5.1 million bags of refined sugar per year, this translates to more than P520 million of uncollected VAT on refined sugar annually.

Galanto added, "the cooperatives claimed that they are co-producers along with their members, but despite several attempts and negotiations with them, some continue to refuse to open their books to us and reveal the names of their members and buyers or their proof that they are indeed co-producers, so we can proceed to investigate the matter and find the party that will be properly taxed."

"I, along with my superiors and other colleagues at the Bureau, have exhausted all possible avenues to arrive at a win-win solution, and while I am happy to announce that most of our sugar cooperatives have signified their willingness to be transparent and start paying what is due to the government, there are some who continue to refuse," she said.

She went to assure small planter-members of cooperatives not to be afraid for they are actually exempt from taxation as "our taxation system was made in such a way that it is based on ability to pay."

"Our request is simple. If there is nothing to hide, show your books to BIR and submit the names of your refined sugar buyers. I challenged the cooperatives to be true to their mandate as well in protecting their members. We are not going after the small farmer-members. We urge you to submit the names of your members so we can register them and give then TIN. We also implore the cooperatives not to allow themselves to be used by big planters and sugar traders in escaping their obligation to pay appropriate taxes," she said.

"In the last ten years, the Bureau has failed to collect taxes on refined sugar from cooperatives. So be it. This time though, I have the obligation to keep. I will not be deterred by threats anymore. I am your Tax Collector and I vow to implement the full force of the law – not for me, not for the Bureau, but for the people of Negros," Galanto stressed.