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LKI seeking ban on duty pass-on to consumers

A CONSUMER advocacy group is asking the government to prevent companies from passing on costs incurred from import duties on key goods to consumers.

Laban Konsyumer, Inc. (LKI) in a statement on Thursday said the organization submitted letters to Congress requesting for the prevention of the transfer of indirect taxes placed on businesses to consumers.

These taxes include safeguard and dumping duties on imported cement, ceramic tiles, vehicles, rice and meat products.

“We propose that Congress introduce amendments to the shifting process and stop the passing on the tax burden to the consumers,” LKI said.

Car companies have started collecting deposits after the government imposed provisional safeguard duties on imported cars.

“Under existing tax laws and cases, the liability for the payment of the indirect taxes falls on one person, the statutory taxpayer,” LKI President Victorio A. Dimagiba said.

“However, the burden thereof can be shifted and passed on to another person… (thus) the tax is imposed upon the goods before reaching consumers who ultimately pay for it as part of the purchase price. In this event, the consumer pays more for the goods.” 

Current tax law, LKI said, defeats the purpose of duties on imported goods if the burden is shifted to consumers.

“We also need to prevent windfall profits of the statutory taxpayer in the event of a favorable appeal against the higher tariff, coupled with a refund,” Mr. Dimagiba said.

The law should also ensure that prices should fall in favor of consumers whenever there is a tariff reduction. — Jenina P. Ibañez

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