Primary Products Levy Explained

    He explained why the VPPA Act includes such levies which is smaller than what the former VCMB has introduced in the past.

     “The introduction of levies or a form of tax on primary products is not something we had just endorsed,” he said.

    “As part of the VPPA primary Act, it gives us the right to establish the levy system to collect some money from the products produce, and trade at both locally at the export market so some of these monies can be used to fund the activities of the VPPA.

    “The law says you can impose a levy on the products that are traded into export markets, also on products traded internally and imported products. Bear in mind that it has to be primary products, not in a form that is altered, processed or value added.

    “VPPA serves primary producers, meaning farmers that are producing crops, raising animals, and planting trees, those are basically our clients.

     “They are the resource owners by our definition. If they are selling directly in the markets or it there are people within their value chain, which are purchasing from them and are exporting it, that amount, which we are proposing to extract, whatever that has come from whoever is trading it to a consumer. And so, along the lead chain, it can be a farmer, that we will be extracting from if he/she is exporting directly or it can be an exporter who buys these raw products from the farmer and facilitating it into the export market.”

    Mr. Tumukon said VPPA has consulted the primary producers in all six provinces and informed them on what is happening, both the levy itself and the law states that once a VPPA member, they have to pay an annual membership fee.

    He explained the process on how they are conducting VPPA’s business, the primary producers are happy to be paying the fees themselves.

    “This is a piece of legislation that give us the right to institute these levies,’ he said.

    “Now the process of managing it and utilizing these monies are established within the law itself.”

    Mr. Tumukon admitted there were experiences in the past years and concerns on how monies were utilized by the predecessors when they are collecting tax monies.

    He understands the concerns raised by some farmers, however he assures that when collecting money under VPPA in the form of levy, VPPA will monitor the processes established, to make sure that VPPA provides the money back into the sector it looks after.

    Source: Daily Post