EFFECTIVE AND
PROTECTION
INTER{_IAL I_DIRECT
IN THE
PHILIPgI_iE
RoGo STAFFPAPER
RATES TAXES
SETTI,__G
Manasan SERIES
NOo
83-04
EFFECTIVE
PROTECTION RATES AND INTERNAL INDIRECT IN THE PHILIPPINE SETTING
ROSARIO
I.
TAXES
G. MANASAN*
Introduction The
program
of
thrust ire
_over_lent
of
"realignment the
effects
leave
is currently
realignment
arising "protecting"
program
is part
ment
to
well
as part
World
General
the
the
be
of
the
The
to remove
to
tax
the
on Tariffs
system_ and structure.
standing and
reform
main
the protect-
tariff
government's
structural
Bank',, Structural
taxes".
indirect
function
Agreement
of
indirect will
from
the
The
of
contemplatil,g
commit-
Trade
(GATT)
concomita_t
Adjustment
Loan
this
is to
to
(SALII)
as the
to the
Philippines, The
_bjective
importance effective
of
indirect
protection
eonsequentlF, government "realignment"
of
taxes rates
to provide can
based
its
study in
under some
the
measurea_ent
various
guidelines
actions
examine
regarding
the of
schemes
and,
on which the
the
so-called
issue.
*Research Fellow, Philippine Institute for Development Studies (PIDS). The author wishes to acknowledge Dr. John H. Power for his invaluable comments and suggestions. Able research assistance was provided by Miss Anicia C. F_yos. Ms. Delia Romero typed the manuscript.
-
Section internal ive
framework taxes
of
are
separated the
the
empirical
and
its way
ations
the
in which
disousses
by
2 describes
indirect
nature
data
tax
the
system
same. the
a summary
as well.
and
used
that and
the
Section
4
adopted
in
the
results
5 presents 6 concludes policy
protect-
indirect
methodology
some
existing
a theoretical
of
tariffs.
Section
provides
on
effect
Section
Finally,
the
3 presents
of
the
of
expounds
protective
from
and
operation
Section
estimation.
analysis. of
2 -
the
paper
recommend-
-
2.
The
Protective
For indirect the
advance
units
taxes
applies tax
equal
and
an
compensating use
and
sale.
to
which
Among
local
goods those
applies
others,
form
it applies
tax, The
_,ount
per
x
notably
The
rest
local
goods.
are
sales
The
advance
that
will
be
subjected
which
wall
be
resold.
to imported
not
of
sales
articl_s
The
i_n
tax.
products.
produced
Taxe_
types
compensating
basis.
and/or
does
the
selected
imported
tax
tax,
alcoholic
to domestically
processing
four
to a specified
ad valorem
to
Indirect
consider
the
applies
applies
further
sonal fQz
on
we
and
a tax and
Internal
specific
tax,
petroleum
levied
sales
The
is
produced
tobacco,
to
the
sales
tax
of
purposes,
taxes:
specific
tax
our
Nature
3 -
part
goods of
on
for
another
imported
pergood
capital
equipment. The tax
system
following
protective
is due features (I)
to one of
or
the
different and
(2)
effect
imported goods_
of
Philippine of
some
system:
tax
the and
the
a combination
rates
domestically
timing
of
for
imported
produced tax
payments
domestically
goods; for produced
indirect of
the
-
(3)
the
valuation
imported
4 -
of
and
the
tax
base
domestically
of
produced
good; (4)
(5)
the
mark
base
of
the be
Other imported ally as
that
extent
things
to
the
goods;
which
being to
has
same
Code
mobiles,
certain
semi-essential
watches,
clocks,
gas,
oil
and
recorders,
ing
products,
their The
after and
the the
goods)
locally
end
of
sales each
compensating are
payable
protective
effect
According
to
National
are
is
quarter
upon
subject
to
and
electric, tape
freezers, fish,
agri-
wheat
detergents, higher
writ-
sales
tax
counterparts.
tax
tax
and
auto-
cases,
fans,
and
and
pens
book
exhaust
milk,
of
lake
cases,
soap
the
versions
ponographs
meat,
produced
local
same
refrigerators
etc.
on
domestic-
and
medicines,
rate
the
show
ranges,
processed
notebooks,
tax
articles
fans
and
manufactured
pads,
than
electric
stoves
can
on
imported
beds,
televisions,
cultural flour,
(NIRC),
sofas,
imposed
the
good.
Revenue
chairs,
tax
credits
a higher
that
Internal
ballpens,
the
and
tax
equal,
equivalent on
to
of.
relative
produced
applies
imported
availed
goods
a tariff
up
payable while
(i.e., release
the from
within the sales
20
advance tax
customs
days sales
on
tax
imported
custody.
-
The
specific
the
removal
while
tax of
the
specific release
of
Thus,
we
sales
tax
cost}
to be
by the
tax
on
sold
paid
for
(price
sales
or
the
by
the
sold.
tax
rate
and
is
The that
landed
cost
cent
except
of
mark-up is
(i.e.,
home
ively,
for
plus and
tax which
25 per
In
become
this
is
cent,
the
based 50 per
case
the
heve
been
goods,
the
advan_ ._
before
the
good_
cost
to be
20%
ar_J
cost.
tax
on
gross
is
the
value
(HCV)
tariff and
article,
i00
p_i¢:_:
inclu_i_,_
plus
other
a mark-up
the
selling
tariff
and
inclusive
cent
of
goods
additional
plus
ordinary/essential
the
is
commission
on
eventually
rate
consumption
tariff
the
interest
sales
postage
same
paid
based
insurance
is
the
be
landed is
of
interest
after
imported
should
of
due
after For
tax
advance
freight
compensating
sales
the payments
goods.
before
warehouse.
(specifically
assuming
cent
customs
imported
tax).
the
HCV
cost
is payable
and
estimated
local
of
upon
of production
importer/traders
tax
i per
place
the
timing
payments
(1982),
20%
of
from
presumably
plus
Lowe
approximately
while
of
tax,
its
is payable
articles
additional
compensating
are
from
articles
user/consumers
been
products
imported
that
borne
have
cost
product
induces
sales
The
the
observe
local
per
on domestic
said
the
5 -
I_
c harg_.s
and
that
,._f
landed
cost
onlh_.
inclusive
landed
per
re_ct
cent,
semi-essential
and
non-essentials.i/
uniform
1/As of March 16, at 25 per cent.
1983,
the
mark-up
has
been
mad_
.The present
v_,_iua_:i,>,_ pr_¢:ti<_e would
have
no protective
,Q.ffect i._7tJ._,.,_ l__porte...,.,:-...middle_e,_ and the Weze
comp._a_l'e
the
legal
st_:ges in. the
mark-cp_
importer-middlemen's _8
that
_nts
impo_t ..
distribution
profit
' " -_-• put ' dl_ec_ly
margin.
in_tead
throt'.gh mid<.[!l<:am._m while
their
from
_is
would
j,..,,..>.:_ ._ ....... _{_v _ 'C.z.le_:_%£._.(:;i,-lon ......... _" of
_as@
since
.__: '__<->,,-_._.._o: :. .... .,_, _:__.,"_.,-_•...,;...,.-.._o ma=k-up the
., '.
assumption
if
the here
consumers)
import
seine buyers
_.,..., .... ;.................. =..._ ,gc._.._<i_ectly
of
intermediate
get
%he
and
estimate
The
,,_~_ as .... _'_' as
gate
process
rep_._%,_.ent an accurate
m_o=t b'.lyc.2s(final
do. not
factory
require-
purchase
factories.
the mark-up
domesThus,
in
tax
sales
tax
advance
the
, . ...
would
be
.:.:_. •.... :_'_,, _... ....... ..... __.<_
of
the
value
of
the
imported
...,
product value
paid
rate
applying
to gross
of• -.?h_.._. l,z<._d_-,i•< ,:._...•.o_.uc,..u good as well
as value
of
product
t<.............. ...:; i._mn_]r-{=e__ %.harttax
a_: .t_.-:_...,._ '-,. ,--"_:. ___..-£.r,-_ cost) ...." "
pOrte_ ing
do
r_ot
_:....at
all
clear
that
fact,
the
could
the
mark-up
as ,_asily argue
._:a,_cnase_:he_r ooods ......... ' . . directly
Nevertheleas,
pr&<gsic::._,does if
t}..e_ fixat
not
appear
valence"
from
to be
sc**em_"" _- discussed
198 _ ',_......... :;_-_" "-,'- _fh.iie the. 25 per cent
the
m,,:;zi:,:<.'.'.::? _':"_:7." .:_-.:2conablyrepresen-_ "_ _ .......... " " ___,...._< _.¢th. _:.:.O c:_ iittle
per' c_:_.'_ _. ..... _a,,...:._...:..-..:-... >._cv._-atates the
im-
competthat the
indire,,_tly • _"_' _nrua._jn ....... "........ a._,.c:era _ '-_,. If this
rather
i00
'
sourc.9._:., c..-f -:_,_:appl_. One
but
per
_
.-m...¢._., ......... =..,....... _m.-:,.c-..,..<.,._ _,._._.._.,,,g a;:"e in
buyers
_owe
the
is
most
factory
true
then
justified. above
cent
and
holds, the
50
".variation.-equi-
protective
effect,
importer-middlemen'
the s
profit
margin.
up
have
may
This
sating
tax
will
result
than
the
if
which in
tax
resulting
in For
sales
said
the
does
not
lower
Goods credit
credit
able,
the
protective
purchase the
of
input payments
no
credit
tax
effect
results
uation
basis
plus
on
the
mark-
the
compen-
in
its
base,
to
tax
base)
the
con,--
payments
the
the
may
on
inputs.
advance
differential due
to
early
liabi-
avail In
of
cases
result lag
tax
between
tax.
the rate
from
credits
sales
applies,
tax
possible/avail-
time of
paid
not
would
the
availment
the
is
subject
taxes
sales
taxes
inputs
from
goods
mining
the
(small)
provision
cost
cent
that
of
and
taxes on
arising
of
from
tax
manufactured
specific
taxes
and
of
recall
against
effect
cost
advance
where
to
for
then
mark-up
timing
specific
provision
tax
additional
locally
credited
subject
the (ratio
the
per
costs.
into
where
the
advance
be
holds,
However,
percentage
may
rate
I00
effect.
include
@ax.
would
the
scheme
tax
additional
tax,
tax
first
sales
that
protective
the
inputs
inputs
lity.
a
local
pensating
to
implies
considerable
Again,
7 -
and
In
cases
protective as
payment.
well
as
val-
on
-
9 -
or more simply,
tj-[a,,
EPRj --
•
where:
l-
_ a.. I z]
to the
output,
i refers
to the
typical
is
the
used
t
the
sales
on
ion
for
rate
free-trade
to produce
output
j; and
is
tariff
the
a systemof
tax
tax•rate
(2)
j refers
aij
Under
rate
on
domestic
good
If
the
=
sales
domestically j_._ = s_k
tax
_
rate
produced = Sk,
then
rate and
on
of
input
value
of
commodity
sales
i
i.
taxes • where
i is
sm i and
sd i
the effective
the
sales
pro_ect-
j is:
_ _ al.j(l+ti) (l+sazi)
(I_._
---
value
goo_
i is
(l+t")(I+m_L 3
EPRj
input,
a unit
tariffs
imported
commodity
_
t _,
_J
i
i
- i
{3)
1 - _ l aij
on imported good
i is
(3) reduces
good unifo1_, to:
k and i.e.
that if
on
- Ii If
tax
credits
puEchases iately
are
and
mediate the
for
taxes
allowed
price
of
on
if
said
and
costlessly,
products
paid
then
to the
importing
the
both
credit
net
is
and
imported
obtained
domestic
intermediate a similar
domestic
price
immedof
user
should
just
net
of the
tax
good
interequal credit
i.e.,
Pd_ l+sd.
1
1/Note
=
(l+ti)Pbi
that
the
gross
Pbi(l+t i) (l+smi)
and
the
price
tax
i/
of
credit
(6)
the on
imported imported
smi(l+ti)Pb i. Thus, the price net of the the price to the• intermediate user, •is:
tax
input
is
inputs
is
credit,
Pdi .
Similarly
•,the
Pd i = Pbi(l+ti)
inputs
is
inputnet
Pai
gross
price
(l+sd i) while
sd. Pd i 11+sdi•.
Hence,
of
credit
the
_ sdi
of
tax
the
domestic tax
thepri_e
1
=
input
credit
of
is
Pd. Pd. l l _ _ l+sd. 1
the
(l+ti) Pb__"
on
the
is
domestic
domestic
i.e.
- 12
Accounting vided
in
ion
the
formula
the
mediate
value for
EPs _ J
On
for
the
added
final
hand,
goods
is
credit
system, is
the
for
the
inputs
as
effective
modified
i 1-
other
tax
goods
(l+sdj
-
- I
as
pro-
protect-
follows:
-
(7;_
[a.,
effective
reduced
protection
rate
of
int_
to:
â&#x20AC;˘.- (l+tj) - i_ _ij(l+tl) EPRj =
(Tb)
- I
I- _ i %j
If
it
is
exists, taxes rate ed
i.e. on
for by
now
assumed
a
inputs
scheme
that
where
areallowed,
both
intermediate
equation
(7b)above.
a
uniform
value
smj
= sdj
then
the
and
final
and
added
credits
effective goods
tax
may
system
for
protection be
represent-
-
Equations
(i)
a uniform
value
on
both
and
(7b)
added
credit
system
oostlessly.
tax
system
mediate
has
no
has goods
credit
no
implies
under
the
is â&#x20AC;˘obtained
effect
that
protective
in
effect
full
tax
â&#x20AC;˘immediately
a non-uniform
protective
of
pointed
out
the
(sales
of
sales
receipts
usually
their
release
from
in
increase
in
consideration goods
taxes
on
on
value
the
case
in
of
the
is
added of
int__r--
effective
2xom
fron_
the
inputs. tax
the
liabilit.2-
for
twenty
sale
has
days
period
inputs
must
be
practice
additional protection
working rate
f21_ce a].sop
pai4
has
requirements.
afh_=,_
taken
this
capital
advance,:/ was
within
This
the
It
incurred
which
imported
this
arising
sales
occur
working
abstract
imported
the
Customs.
costs
above
costs
goods
qua_rter
interest
(7b)
that
the
sales
final
tax
produced
while
an
and
holding
earlier
do_estioally end
(7a)
capital
payment
before
resulted 'l'akin_ capital
formula
i:nt_ for
becomes:
(l+tj)(l+_mj) (l+sdj) EPRj
This
goods.
additional
the
tax
final
Furthermore,
Equations
the
identical. system
and
where
and
are tax
intermediate
13-
_ _. aij i
-
(l+ti)[I+
r. (sml)] -_l. ..
1
- _ aij 1
(_::)
- ].4-
where of
r is
the
the by
relevant
timing
rate. is months
the
20
difference,
per
, then
cent
r
effective the
interest e.g.
and
should
the
be
needed
to
the
annual
market
if
ma.xim_
5 per
protection
rate
rate
timing,
cen-.t I/ of
On
take
account interest:
difference the
intermediate
is
other
3
hand,
goods
is
gJ.ven
following:
(l+cj)[l+r_(smj)]Z aij <]4ti) It+ r(sm£,_] i F/Rj =
---i
NOw,
if,a
(Sa)
is
uniform
revised•
value as
(8b)
±3
added
tax
._]yste.--:_, is assumed,
•then
follows:
(l+tj) - _ l aij
EPR_ = J
.I
(l+ti) (I.+r smi)
- _I
(9)
I - i_ aij
However,
(Sb)
remains
unchanged.
1/If c_xpital,holding cost is not ignored then the net domestic price of intermediate g_x_s should just equal the price of _mporting a similar good inclusive of the capital costs but net of the tax credit, i.e., Pd t
l+sd i Note
that
the
gross
(]..+ti) It+r (sinl) ] price,
of
the
_r_-_d
input
_iH_
capital
into acoount is Pb. (l+ti) [i_ (l+r)]:_nndt_e tax credit This yields a pric_ net of the _ cr_-lit _Tual to:
_ts
is smi(l+_)Pb
(l+t i) [l+sm i(l+r) ] Pbi~ sml(l+ti)Pb ! = (l+t I)[I+ r(s,_i)]Pbl -
Pdl l+s di"
i.
-
added and
The
ana].ysis
system
has
locally
ive
capital
goods
holding
non-uniform effect
holding In
of
discriminatory
may
proceed
in
into
taxes
with
EPRs
taking taxes
i's;
and
just
1/It offset
its
into under
(3)
take
the
inclusion
evaluate of
stages, both
or
val.ue imports
abstracts intermcdi.--_te
has
no
protect-
or
non-inclusion
of
final
some
of
goods,
a
protective
r_on-inclusion
tariffs
account
both
asstu_pti.<,n â&#x20AC;˘
the
is posaible the effect
the
protective
the
indirect
name]y:
discriminatory
the
have
one of
system
case
cou].d
if
case
inclusion
in
elements three
J.f J.t treats
the
tax
the
of
]-'/
to
account all
rect
the
the
general,
_nd
in
added
scheme
costs.
summary,
the
(2)
(3)
tax
regardless
capital
of
in
unifo_nly
value
costs,
value
(i)
effect
costs,
regardless
holding
that
protective
a non-_inifor_
effect
taking
no
produced
fronl capital goods,
shows
1,5 -
differe,_ce
and
effect tax
(])
that
(2)
and
that the effect of sin. # sd.:.
said
of
EPRs
estimate
domestic
sin. i = sd.l
between
one
indirect
elements; tariffs
system
estimate
domestic
of
for
indiaJl
estimates.
r(sm i)
could
-
4.
Methodology The
237
x
237
Census 1985 and
EPR
the
sales
rates
in
between domestic
.free
(NCSO),
tI_e Tariff and
National
trade
value
value
estimates
for
general,
tax
rate
a,<;of
Inter.hal
Revenue
the
mark-up
were
provision
by
inclusive
landed
second
includes
tlle said
assumption
cost
is
the
one 25
t.o tariff
(1979).
advance
the
mark-up
[._ro-
converted
sa.lc_s
excludes
per
product In
]981
tables
Power
to
the
I-0
and
equal
mark-up.
of
implicit
first
the
].982
mid-]983
the
The
of
that
of
of
Code.
were
Medalla
used. is
1974
using
fo_+ â&#x20AC;˘
legislations
which
values
which
tariff
implicit
The
by
alternative
National
taxes
1983.
computed
the
the
tarit-'frates
or..-Jers and
and
on
_eciÂŁic
coe[fici.ents
imports
from
the
and
based
Code
coefficients
1974
two
on
1981
are
Customs
relevantexecutJ_ve
mulgated
In
the
study
for" .1974
Office
in
tax
this
tables
contained
other
yield
in
estimates
StatistJ.cs.
as provided and
Data
input-output
and as
and
16-
cent
of
while
Lhe
the
latter
the
provides
addition_._l
protection. Four One, (Sb)
different
EPR
is
for
final
this,
EPR I).
existing
tax
EPR
computed and
on
estimates
the
basis
intermediate
This
estimate
credit
system
uniform
value
added
holding
costs
arising
system), from
were of
now
into
in. force
and advance
the
and
equations
goods., takes
made
comÂŁ.',a_:_d+
(Sa)
and
respectively
(call
account
tile
both
(.i.e. a non-
additional
payments
of
capita] sales
tax
- 17 -
on
imports
EPR
assuming
is _omputed
this
EPR2).
credit
This
and
computed
a uniform
capital
computed.
uation
where
tax
rate
for
taxes
were
treated
them. into
Ideally, value
tradable these
inputs.
two
approach
which The
degree
of
costs.
protection difference
produced
rates goods.
where
all
added inputs
between
to
of
the
should and
on
difference
,
no
in equation
1983
is allow_ inputs
industry
cost
of
and
found
that
of
this,
the was
nonfrom
the former
adopted.
EPR 2 indicates
to the
capital
and
internal on
locally
EPR 2 and
th_
holding
EPR 3 reflects
non-uniform
between
usin_
be decomposed:
results
imports
s_-
internal
the
EPR 2 and
the
and
non-tradable
EPR 1 and
between
inter-
ass_ues
credit
simpler
attributable
due
the
tax
compared
In view
and
_
a hypothetical
inputs
procedures
applicable The
no
EPR
as defined
and
cases,
(1979)
Three,
sm i = sdj,
rates
tax
is obtained
estimate
EPR
Two,
(call
existing
final
assumes
is computationally
of protection tax
Four,
tradable
"slight".
difference
The
amount
Tan
This i.e.
of value
cost
alternative are
both
EPR3}.
(7b)
credit
for
non-tradable
added,
deviations
rect
as part
tax
(Tb)
but In
the
cases.
tariff
on â&#x20AC;˘inputs.
and
a11
estimates
operative
(?a)
the
system,
1985
20 percent.
in
â&#x20AC;˘costs.
This the
are
that
this
added
of
considers
assumes
(call
rate
equations
equation
value
additional
on
costlessly
using goods
interest
estimate
but
immediately
3 is
based
system
mediate
an
EPR 4
th_ ind$-
- 18
measures
the
adoption
of
for (1}
final
protection/disprotection the
existing
products
the
EPR 1 < UPR 2, _ EPR 3 as
(5} EPR 4
_ EPR I.
is
EPR 4 â&#x20AC;˘
not
clear
value
arising
added
following
long For
as
smj
< sdj,
intermediate
whether
EPR 1
system.
relationships
(2) EPR 2 > EPR 3 as
(3} EPR 2
but
-
_
long
from
the
In general, hold=
as smj >
sdj,
(4) EPR 4 < EPR2;
products, 2PR 2 and
and
EPR 2 = EPR 3
whether
EPR 2
- 19-
5.
Analysis Following
157
produc6ion
dered
sectors
nontradables
them.
EPR
remaining
127
evaluate
taxes
rather
a given
cluded
sectors
several
to
the
then
were
no
EPR
estimates
were
derived
made
time.
are
only
focus
the
the
are
are
consi-
of
fOr
the
present
internal
pap@r
indirect
of protection
said
subject
vis-a-vis from
of
the
structure
Thus_
which
40 out
of
effect
zubject
which
X-0
for
the
analize
(import_
1 presents sectors
of
previous
40
s_ctors
tO
non'unlform
locally
in-
manufactur_
the
mark-_
provision,
(2)
to
specific
taxes,and
(3)
decayed
not
elements
four
to be in the
different
the
1974
section
for
EPR4).
compared
to
discriminatory
too
gr@atiy
sales/specific
These
Philippine the
four
evaluate
the
elei_ents
_PR
estimates
for
I-0
(Re-
definitions
alternative
the
of
EPRI,
estimates
protective
of
table
effect
internal
of
indirect
system. For
and
tables
abstracting
EPR 3 and
various
less
1974
the
system.
EPR2,
tax
the
by discriminatory
40 selected
are
to
which
Table
fer
in
sectors
sectors
affected
30 of
since
in
rates
after
classification,
protective
than point
tax
goods)
tax
the
(1970)
were
sectors
(i) all
sales
all
and
estimates
isto
at
Tan_s
than other
ference
final
products,
1 percentage washing
is more
and than
EPR 1 , is
point
except
cleansing 1 but
less
less
than
for
sector
compounds) than
EPR 2 by 109
where
2 percentage
(soap
the
dif-
points,
- 20-
For
intermediate
than
i percentage
products}
capital sales
tection
tax to
points
one
difference
points
and
These
figuresreflect
sales
tax
If one then
rates
considers
another
protective system.
on
4 to effect
This
and
the
the
whose
and
mark-up
the
difference
18percentage effect
provision
of
the (for
to
36
points, l/ non-uniform
produced
goods.
as discriminatory
points
is added
non-uniform
value
averages
8 percentage
at
the .
zero
= sdj}
pro-
than
provision,
domestically
15 percentage of
costlessly
smj
protective
the
where
from
than
paymentsl
no more
situation
EPR 3 ranges
mill
less
(increases) by
less
additional_:_
advanced
and
at
1 but
the
the mark, up
those
imports
(textile
products
averages the
72
that
lowers
to
from
EPR 2 by
than
the
immediately
EPR 2 and
products
percentage
from
relative
abstracts
between
intermediate
indicates
inputs
than
sector
is more
{intermediate}
is obtained
If
greater for
arising
imported
final
credit
This
costs
on
except
difference
points.
2 percentage tax
the
holding
EPR 1 is
point
where
2 percentage
of
goods,
added
to the tax points.
I/ Sector 143 (motor vehicles) which registered a differ_m_e of as.mu_h as 327 percentag_ points is not Lncluded here since, in.. fact, due to the existence of quantitative restri_ on automobile i_, the assumptions made in the present st_K_yare not valid fo@ this sector,
- 21 -
The
difference
the-protective sales
tax
from
I to
age
iable
fro
final
indirect
the case
of
good
of
value to
protective it is
although effect value
the
of
3 November
tax
is
holding
the
protective goods (3) the
effect
which
are
non-uniform
rates
is
considezable,
mark-up
provision
of discrimination,
shaft
from
a single
system
is
not
and
is not
(4) the stage
small.
in
sub-
protective
cases
the
cost_;
existing
An
of
var--
(i) the
system
{3};
1983
no
rates,
than
tax
inter-
difference
capital
and
less
the
added
has
For
tax
effect
is
12 p_ÂŁcent _
following:
costs,
goods,
added
a source
it
the
capital
system
sales
of
points.
additional
intermediate
is subject
fact,
the
tax
to a uniform
the
s-rage_
syst_ml rang_
(EPR 4 < EPR2). of
measures
singlu
withâ&#x20AC;˘ a mean
conclude
(2) ignoring
internal
the
of
the
tax
15 percentage we
EPR 4 which
from
added
direction
at
effect
slight,
effect
value
products
summarize,
protective"
shift
points
th_
averages
EPR 2 and
the
to the
products, but
ject
of
36 percentage
To
is
effect
system
points
mediate
between
where
if,
a (4} in
negligibl_
protective
sales
tax
to
a
Table I.
Effectige Protection Rates for Selected I-0 Sectors, 1985
Sact_z --_ Sector Description
No.
Page 1
_ EPRI
EPR2
EPR3
_R 4
t
sin'
.4505 .4866
.30
.i0
sin"
sd
.125
.01 .01
.125
.01
.125
.01 .01
.125
.01 .01
.125
.01 .01
.125
.01 .01
.125
.05 .05
.125
.05 .05
.125
.05 .05
.125
.05 .05
.125
.05 .05
r
Citrus
004
.4629 .4990
.4635 .4997
.3333
Pineapple
005
-.0079
-.0068
-.0068
-.0296
0
.i0
Coffee
011
.5400
.5324
.5324
.6679 .7077
.50
.i0
.4750 .5102
.34
.6695 .7120
.50
.6229 .6599
.49
.1287 .1989
.Ii
-.4528 -.3808
.15
-.0200 .0265
.04
-.0849 -.0483
.07
.2118 .2505
.25
012
O3mmercial Fishing, Ocean and Off-Shore
Slaughtering and Poultry Dressing
Meat Products, Canned
M_tProducts,
thcanned
Evaporated and Ccnd_edMilk
Fish Canning
Other Fish and Seafoods Products
025
039
040
041
042
047
048
.3620
.5475
.4977
.3552
.5401
.4902
.3552
.5401
.4902
.2053 .2755
.2094 .2796
.0689
-.2256 -.1537
-.2137 -.1417
.3575
.0738 .1203
.0787 .1253
-.0143
-.0230 .0136
-.0198 .0168
-.0929
.2552 .2939
.2575 .2962
.1802 L
.i0
.I0
.I0
.i0
.i0
.I0
.i0
.10
Page2
SectDr Description
Sector
Distilled , Rect/fied and Blended Liquors
065
i.0706
1.0825
.7674
.8431
.50
.30
•30
.18
Wines
066
.4407
•4568
.3237
,1348
.31
.15
.15
.i0
Brewery and .MaltProducts
067
.4407
.4465
.4666
.3301
.43
.09
.09
.i0
Cigarettes
069
.3363
.3514
.6836
.0504
.50
.16
.16
.25
070
-•1030
-•0985
-.0985
-.1900
.03
.08
.08
.08
072
.3712
.3476
.3476
.1591 •2915 .5202 •6707 •1591 •2193
•29
.25
.2625 ,3009
.30
Cigars, Ch_/ng
and _T_king Tobaoco
Textile Mill Products
Foo_ear,
_eady-_de
Except Rubber and Plastic
Clothing
Pulp, Paper and Paperboard Manufacturing
_aper Products
077
079
087
088
.125
.25 .25 .10 .i0 .i0 .I0
•125
.I0 .I0
.125
.I0 .i0
.3125 .25 .3125 .I0
.3018 ,3402
.3039 •3423
.3039
.0083 .0415
.0119 .0451
.0119 i
-.0612 -.0280
.08
.1699 •2146 •2635 .3103
.1741 .2188 ,2677 .3145
.1741
.0296 .0743 .1232 .1701
.17
.8883 •9700 i.0595 1,1451
•8975 .9792 i.06_7 i._543
,8975
.7145 .7962 ,8857 •9713
.4_
.i0
.I0
.i0 .125 .I0 .125 .i0 ._25 .I0 .125
.I0 .i0 .05 .05 .I0 .i0 .05 .05
Page3
_.
Sector
T_rm/ng
_icina/
Co_netic
and Leather
and Pharmaceutical
and Toilet
Products
095
Preparations
Preparations
of Petroleum, Machinery
and Cleansing
Compounds
.1377
.1377
.2356 •2794 •1480 .1899
•2398 .2836 .1523 .1941
.1523
*
*
*
-.0649 .0066
.29
•1558 •1996 .0682 .1100
.17
*
.50
.50 .10
1.8798 2.0324 I.5747 1.7203
.49
.i0
.2818
.2819
.2819
.2790
.28
Coke and Coal
113
.1644
.1686
.1686
.0836
and Equipment
129
.2293 .2697
.2321 .2725
.232!
.9294 1.0653 .6034 .7230
.9357 1.0716 .6098 .7293
.6098
.6598 .6649 .7792 .7843 •9855 .9906 _. 121.3 ....... i. 1264
.6649
and Airocrditioning
Equipment
140
.. ...........
.10 .10
.125
.05 .05 °i0 .I0
.625 .125
.50 .I0
.i0
112
139
.10 ..125
1.9297 ,
P,hones
.i0 .125
2.2348 2. 3874 i. 9297 2•0753
Sets,
109
.1433
2.2171 2.3697 I. 9119 2.0576
Radio, TV Reoe/ving
P_frigeration
107
108
Refineries
Agricultural
Household
Sector
Finishing
_%_ap and Other Washing
Petroleum
Description
.125
.05 .05 .I0 .I0
_15
.15
.15
.19
•15
.15
.15
.1802 .2206
.23
.i0 .125
.10 .i0
.8095 .9453 .4835 .6030
•50
.5626 .682! .8884 i. 0241
.50
.125 .I0
.25 .3125 .25 .3125 .25 .3125 .25 .3125
.I0 .i0 .25 .25 .25 .25 .10 .i0
Secbor Sector Description Sports,
Equipmex_
Pen, Pencil,
Toys, Dolls,
Parlor
Games Excl_
has negative
EPR 3 is based on equation on equation
t is the tariff _'
is the sales
154
and Artist's
is based on equation
EPR 4 is ha_d
Supplies
155
ng Plastics ,"Rubber
free trade value
156
added.
7a and 7b. 7b. 3.
rate. tax rate on imports
u_" is the sales tax rate _n imports _
No.
and Supplies
Office
*me__ ns the sector
.
is the sales tax rate or_ _tic_!ly
exclusive
of the mark-up.
in_!usi_
of the mark-up.
p_oc%_c_
9oods.
_ .3477 •3938
_R 2 .3514 .3976
_
.3514
.3622 •4866 .3622 •4534
.3649 .4893 .3649 .4561
.3649
.1480 .2714 •1480 •1816
.1510 .2744 .1510 .1847
.1510
EPR 4
t
.2767 •3229
.32
.3078 .4322 .3078 .3990
.33
.0903 .2137 .0903 .1239
.16
sin"
sin"
sd
.125
. i0 .I0
.10
.i0 .175 .25 .3125 .50 .625 .10 .125
.i0 .10 .25 .25 .50 .50 .i0 .10