Tobacco Farmers Protest New Excise Tax

Source from:  Sun.Star Baguio 02/13/2012

Thousands Virginia tobacco farmers and provincial officials aired their protest against a proposed bill seeking to restructure the excise tax collected from alcohol and tobacco through an indignation rally on Tuesday. Tobacco farmer leader Benjamin Sarmiento said House Bill 5727, authored by Representative Joseph Emilio A. Abaya (1st district, Cavite) seeking to restructure the excise taxes on alcohol and tobacco products, is not favorable to the tobacco industry. The tax bill was tagged as a priority by the Legislative Executive Development Advisory Council. "If the bill will be passed and be approved, the tax for locally made high quality cigarette will be increased from P12.00 per pack to P30 per pack until 2014 while the premium imported cigarettes would only increase from P28.30 per pack to P30.00 per pack in which the importers are greatly benefited unto this bill considering that only 40 percent from the total volume of cigarette produced in the country are high quality and the remaining 60 percent are low quality," he explained. "Thus, if this bill will be approved why I could buy locally produced cigarettes if it has the same price with the imported cigarettes; then, the saddest part is that; the market and demand of our low quality tobacco will probably be decreased and eventually this might lead to the death of our local tobacco industry," he added. Sarmiento led at least 5,000 Virginia tobacco farmers from Ilocos Sur and Ilocos Norte in a rally in front of the Provincial Capitol of Ilocos Sur asking President Benigno Noynoy Aquino III to disapprove the proposed law as it is detrimental to the tobacco industry. "We are also appealing to Finance Secretary Cesar Purisima, our province-mates, to take further study into the impact of the HB 5727," Sarmiento added. Meanwhile, provincial officials lead by Vice Governor Deogracias Victor B. Savellano expressed their strong opposition to HB 5727 which contains the Department of Finance (DOF) proposal for a unitary excise tax system. "We do not agree and cannot accept HB5727 of Representative Abaya, which is being pushed by Secretaries Butch Abad and Finance Secretary Purisima. HB 5727 will destroy the tobacco industry and kill the livelihood of our people," the local officials said in their letter forwarded to Davao Representative Isidro Ungab, chairman of the House committee on ways and means. However, the local officials passed a resolution in support to the current excise tax structure on alcohol and tobacco products, saying it allows these sectors to grow while generating a more stable and predictable revenue for government. The resolution expressed the unequivocal support of the local officials for the sub-committee Report No. 6 of Ilocos Sur Representative Eric G. Singson Jr., which responds to the government's call for additional revenues without sacrificing the livelihood of some nine million people, engaged in the alcohol and tobacco industries. Under the approved subcommittee report, increases of the tax rates ranging from four to 10 percent will be imposed on the four tax tiers over five years with the lowest tier absorbing 10 percent. The increase will be done every other year over the five-year period. Enditem