The Department of Trade and Industry on Monday disclosed a plan to increase the tariffs on all imports by 5 percent to raise additional revenues of P245 billion and help fund the government’s efforts to contain the pandemic.
Trade Undersecretary Ceferino Rodolfo said that under the proposal, that increase will affect all imported tariff lines from all trading partners.
“This will be across-the-board so that it will not be misinterpreted as a protectionist move. The proposed tariff will add to existing tariff, which means above or on top of actual tariffs,” Rodolfo said.
He said that for ASEAN trade partners where most tariff rates are zero, the tariff will increase to 5 percent. For other markets such the US, the tariff level will rise to 35 percent from 30 percent.
Some agencies, however, expressed concern over the proposal, saying this might not be prudent in the time of pandemic. Among the concerns involved the country’s commitment to some international agreements and the impact on inflation.
“We included all products, all tariff lines, to dispel doubts of protectionism. We do not select or give special consideration for any product. It’s really across-the-board because we need to raise money for our Covid-related activities. Tariff increase was limited to just 5 percent so the move won’t be inflationary,” Rodolfo said.
The interagency Committee on Tariff and Related Matters said in a meeting on May 22 that there was a need to assess the viability of the proposal.
“The technical committee said it needs to study the cost-benefit—the impact of cost for manufacturers and inflation for consumers against revenue to be generates for the COVID fight,” Rodolfo said.
Rodolfo said while the proposal was not yet approved, the Finance Department expressed willingness to roll-out the plan within a month.
“So far, the feedback that we had is that the DOF is not yet in dire straits. They can still cope, they said. So we are still holding back the planned tariff hike. We are ready when they are ready,” Rodolfo said.
Rodolfo said the government already issued Executive Order No. 133 which set to motion the tariff increase of 10 percent on petroleum products.
He said the EO was crafted to raise the needed revenues to fund programs that will arrest the spread of the virus and protect people from contracting the disease.