Phillipines: Alcala Expects Farmers to Continue Planting Tobacco

Source from:  Philippine Star 12/14/2012

Tobacco farmers will not be discouraged from cultivating the crop because of the ratification of the six tax measure, according to Agriculture Secretary Proceso Alcala.
 
Prices of cigarettes will soon go up substantially after the Senate and the House of Representatives ratified the sin tax measure early this week. The measure now awaits President Aquino's signature.
 
The measure, which seeks to impose higher excise taxes on alcoholic drinks and tobacco products, was approved in the bicameral conference committee after lawmakers agreed to reconcile conflicting provisions of the bill's two versions.
 
"Farmers' attitude towards tobacco cultivation will not change because there is still a big demand for export. Even if fewer Filipinos will buy cigarettes, I don't think their attitudes will change. I'm talking to them and so long as their income is there, they will continue planting," said Alcala.
 
The bicameral panel agreed to peg next year's target revenue from tobacco and alcohol taxes at P33.96 billion - from the proposed targets of P31 billion from the House of Representatives and P39 billion from the Senate - during the first year of implementation.
 
Of the P33.96 billion, P23.4 billion will be obtained from raised tobacco taxes while P10.56 billion will be obtained from taxes on fermented liquor and distilled spirits. This corresponds to a burden sharing of 69-31 between tobacco and alcohol products.

Other agreements approved by the panel included a four percent tax rate increase every two years, the removal of the sunset provision from the bill and the allocation of 15 percent of incremental revenue for affected farmers, with the remaining 85 percent allocated for the universal health care program of the government. Enditem