Tobacco Provinces Should Get Cigarette Tax Share Hike, Farmers Say

Source from:  GMANews.TV 06/24/2009

Instead of opposing a new cigarette tax hike, legislators should ensure that that tobacco excise collections are allotted to tobacco-producing provinces, a group of farmers said. The group, called the Solidarity of Peasants Against Exploitation (STOP-Exploitation), said it fails to understand why their representatives are "opposing the measure that aims to assist poor farmers," it said in a statement. The farmers were referring to Republic Act 7171 which allots 15 percent of tobacco excise taxes on locally-manufactured Virginia-type of cigarettes to Virginia tobacco producing provinces. The group also belied the other groups' claims that another adjustment in the current tax scheme will jeopardize the livelihood of tobacco farmers. "Only the tobacco companies would likely be hurt by the increase in tobacco taxes because of possible decrease in consumption of cigarettes," Avelino Dacanay, STOP-Exploitation chairman, said. Locally-produced tobacco - which will continue to be in demand - remains cheaper than their imported counterparts, he added. The bill proposed by the Department of Finance, which is part of efforts to reform the country's cigarette and liquor taxation scheme, has been blocked by Northern Luzon legislators. The opposition to the new tax scheme is mainly due to the lobbying of local and international tobacco companies in Congress, Dacanay said. "If the congressmen are really out there to protect and advance the interest of their constituents, then they should vote for the passage of the bill as this would mean more revenues for the government that will support the plight of the poor," said Dacanay. Data from STOP-Exploitation found rising buying price of tobacco leaves from 2007 to this year despite the increase in tobacco taxes in 2007 and 2009. The excise tax of cigarettes priced at P6.50 to P10 was P10.35 in 2005, P10.88 in 2007 and P11.43 in 2009. Tax imposed on cigarettes priced above P10 was P25 in 2005, P26.06 in 2007 and P27.16 in 2009. The farmers reported that the average buying price of Class AA tobacco leaves in 2007 was P72-80 and rose to P85 per kilo in 2008. The prices further increased to P90 during harvest this year. The same was apparent for burley tobacco that soared to P120 per kilo from P100 last year. "Whatever alarm raised by the tobacco companies was apparently belied by our very own experiences during the implementation of the existing tax measure. The traders and tobacco companies even bought this year the tobacco leaves which were already classified as REJECTS," explained Dacanay. STOP-Exploitation now has 10,000 individual members in La Union, Ilocos Sur, Ilocos Norte and Abra. Enditem