Support to tobacco farmers to continue under new excise tax scheme - Angara

By Hannah Torregoza

Senate ways and means committee chair Senator Juan Edgardo “Sonny” Angara on Friday assured that tobacco farmers would be continuously supported under the measure increasing the excise tax on cigarette products.

Sen. Sonny Angara (Senate of the Philippines / MANILA BULLETIN) Sen. Sonny Angara (Senate of the Philippines / MANILA BULLETIN)

Congress had earlier approved the new tobacco excise tax bill that provides a four-year graduated excise tax increase so that tobacco farmers can shift crops.

Angara said that under the bill, up to 20 percent of the incremental revenues from the additional duties would go directly to 23 tobacco producing provinces to finance programs that will provide support for tobacco farmers and workers.

“Under the measure, 15 percent of excise tax on locally manufactured Virginia-type cigarettes but not exceeding P17-billion will go to Virginia tobacco producing provinces, while five (5) percent but not exceeding P4-billion will be allocated to burley and native tobacco producing provinces,” Angara explained.

The support for tobacco farmers can be in the form of inputs, trainings, safety nets, and infrastructure, livelihood and agri-industrial projects, according to the lawmaker.

Citing the National Tobacco Administration (NTA), he said at least three tobacco types are grown in 23 tobacco-producing provinces in the Philippines.

Virginia tobacco is grown in Ilocos Norte, Ilocos Sur, Abra and La Union, while burley tobacco is grown in Pangasinan, La Union, Abra, Isabela, Cagayan, Tarlac and Occidental Mindoro.

The native or dark tobacco is grown in Pangasinan, La Union, Cagayan, Isabela, Nueva Vizcaya, Quirino, Capiz, Iloilo, Cebu, Negros Oriental, Leyte, Zamboanga del Sur, Bukidnon, Misamis Oriental, North Cotabato and Maguindanao.

The new tobacco tax measure will raise the excise tax for every cigarette pack from P35 to P60 for the next 4 years. The starting rate of P45 would be implemented in 2020, then followed by P50 in 2021, P55 in 2022, P60 in 2023 and a five percent automatic increase by 2024.

Angara said it is imperative to make a delicate balancing act in considering a measure that would reconcile the competing interests of the government, health advocates, and cigarette industry and tobacco farmers.

State economic managers are eyeing revenues from the higher excise tobacco tax for the continuous implementation of the Universal Health Care (UHC) law, and at the same time, pursue a health policy discouraging Filipinos from smoking.