THE importation of all unprocessed fruits and vegetables are now exempted from the 12-percent value-added tax (VAT), following a recent amendment made by the Bureau of Internal Revenue (BIR), expanding the coverage of the exemption.
The BIR’s recently-issued Revenue Memorandum Circular (RMC) 112-2021 clarified the list of imported perishable food products that are exempted from the 12-percent VAT.
The circular amended the provisions of another circular jointly-issued by the BIR and the Bureau of Customs (JMC 1-2002) to expand the coverage of the VAT exemption to all perishable agricultural food products.
JMC 1-2002 contains the list of imported perishable agricultural food products that are exempted from the VAT. The amendment of the JMC 1-2002 allowed the exemption from the VAT of imported fruits and vegetables that recently gained market access to the Philippines, such as blueberries from the United States.
“The Annex of JMC 48-2002 previously listed all the unprocessed vegetable products and unprocessed edible fruits and nuts that were covered by the VAT exemption. It did not, however, include imported fresh produce that gained market access later, such as fresh blueberries,” a Global Agricultural Information Network (Gain) report said.
“The new RMC clarifies that all unprocessed fruits and vegetables that may be legally imported into the country are exempt from the 12- percent VAT,” the report, which was prepared by the United States Department of Agriculture Foreign Agricultural Service in Manila, added.
RMC 112-2021 amended “Provision C” and “Provision D” of JMC 48-2022 and included the phrase “such as but not limited to” in order to cover unprocessed vegetables products, edible fruits and nuts that recently gained market access to the country.
Through RMC 112-2021, the BIR scrapped the requirement of an “Authority to Release Imported Goods,” or Atrig, for the importation of perishable agricultural food products that are exempted from the VAT. The Atrig was required prior to the release of the goods from Customs’ custody.
The BIR said it issued a new circular after receiving concerns and issues from both revenue officials and stakeholders regarding the requirement of Atrig for the concerned imported products. The BIR pointed out that it scrapped the Atrig in compliance with the Ease of Doing Business Act of 2018.
“Consistent with the mandate as stated under Republic Act 11032, otherwise known as the ‘Ease of Doing Business Act of 2018,’ it is hereby clarified that the issuance of an Atrig shall no longer be necessary for the importation of perishable agricultural food products, such as the unprocessed vegetable, fruits and nuts, which are exempt from the VAT pursuant to Section 109(1)A of the Tax Code, as amended,” RMC 112-2021 read.