Ex-NTA Chief Denounced for Crippling Tobacco Industry

Source from:  By Gilbert Ponsoy, Northern Luzon Bureau  06/09/2004

The leader of the nation's biggest group of tobacco farmers has taken to task a former chief of the National Tobacco Administration (NTA) for crippling the industry by allowing the importation of blending tobacco. Carlos Cachola, president of the Philippine Association of Tobacco-Based Cooperatives (Patco), said his group's problems began in 1999 when then NTA administrator Amante Siapno issued a ruling, "which opened the door to increasing importation of tobacco leaves and tobacco products by big tobacco companies." Cachola said that Siapno's letter on April 23, 1998, to the Customs commissioner resulted in permitting tobacco companies to import blending tobacco and tobacco products without first being required to submit a certificate of authority to import. The "ruling" contained in Siapno's letter to the Customs commissioner said this was in line with the passage of Republic Act 81768, "which automatically lifts quantitative restrictions on the importation of foreign blending tobacco." As such, "our old laws, rules/regulations are inapplicable and inconsistent with R.A. 81768," he said. R.A. 817658 gave flesh to the country's membership in the World Trade Organization (WTO), which led to trade liberalization. Cachola, however, argued that Siapno "overstretched" his interpretation of R.A. 8178. "The law did not remove NTA's authority over importation activities of tobacco companies; so is the BIR's mandate to collect inspection and monitoring fee on imported tobacco shipments," he said. For this reason, Patco formally asked Agriculture Secretary Luis Lorenzo to declare Siapno's move as illegal. "We find Mr. Siapno's action to be inimical to the interests of the local tobacco industry especially the tobacco farmers, who because of constantly increasing importation, are selling less and less locally grown tobacco and at lower prices too," said Patco in a letter signed by Cachola and Alejandro Reyes, the Patco secretary. The Siapno decision, Cachola said, shielded the tobacco companies from paying millions of pesos in taxes to the government for their importations. The Manila Times tried but failed to contact Siapno for comment. He is reportedly in Cagayan de Oro City, where he settled after his retirement from the NTA. According to him, the certificate of authority to import listed down the volume of importation made by the tobacco companies. In turn, the Bureau of Internal Revenue (BIR) used such certificate as the basis in computing the tax liability of the importer at P5 a kilo. Cachola added the tax rate, which comes under the title inspection and monitoring fee, was provided for under Executive Order 109 issued by then-President Corazon Aquino. "With the certificate waived, the BIR has not been in the business of collecting monitoring and inspection fee from the tobacco importers," Cachola said. He estimated that at an average leaf importation of 25 million kilos yearly since 1999, the BIR has lost annual revenue amounting to P125 million or P625 million to date. "With the complementary effects of GATT also favoring tobacco importation, the end result is that companies have lesser dependence on local tobacco, Cachola said, adding: "Clearly, the Siapno ruling and GATT made imported tobacco much cheaper than our own." Enditem