The Manila Times - Farmers beg lawmakers to lower rates on cheap cigarettes

22 November 2012

By Jefferson Antiporda | The Manila Times

The ink hardly dried on the Senate version of the excise tax measure, farmers are already on their knees begging lawmakers to lower the rates in the low-priced priced cigarettes—accounting for 65 percent of the marked—which gets the highest tax increase of 341 percent to 855 percent.

This early, farmers are banking on the members of the bicameral conference committee to reconcile the differences of the House and Senate versions of the tax measure.

The PhilTobacco Growers Association (PTGA) thanked the senators, particularly Senate President Juan Ponce Enrile, Sen. Ferdinand “Bongbong” Marcos Jr. and Sen. Ralph Recto for fighting for the interests of farmers in hammering out the final version of the bill.

The farmers commended the senators for passing a fair and equitable tax measure, that took into account a better sharing of the tax burden between tobacco at 60 percent and 40 percent for alcohol, compared to that of Senator Franklin Drilon’s proposed tax sharing of 75 percent for tobacco and 25 percent for alcohol,

The approved version of the House of Representatives (amended HB 5727), on the other hand, calls for a heavier tax burden of 85 percent for tobacco and only 15 percent for alcohol.

PTGA spokesman Asuncion Lopez credited Senators Enrile and Marcos, who both hail from the tobacco-producing regions of Ilocos and Cagayan Valley, for ensuring a fair sharing of the tax burden from the projected incremental revenue starting in 2013 to 2017.

She, however, noted that the rates on low-priced cigarettes remain high and this would adversely affect their income, since the produce of tobacco farmers are the ones used in the manufacture of the low-priced brands.

The bill approved by the Senate on third and final reading proposes a three-tier tax rate for cigarettes, a unitary tax rate of P26 for machine-packed cigarettes, which would be implemented on the fifth year, or in 2017.

The original proposal presented by Sen. Franklin Drilon, the acting chairman of the ways and means committee, calls for a two-tier tax scheme, a higher unitary tax rate of P32, which would be implemented earlier in 2016.

The final version of the Senate bill retained the target of collecting aggregate revenues of P40 billion from the measure in the first year, with cigarettes accounting for P24 billion of the tax collections, and alcohol products, P16 billion. This would be followed by a three-year transition period, with taxes increasing moderately by P1 to P3 per pack, until the unitary rate of P26 is reached on the fifth year.

“Nagpapasalamat kami kina Senate President Enrile, Senador Bongbong Marcos at Senador Ralph Recto dahil nasaksihan namin kung paano nila pinaglaban ang kapakanan ng mga magsasaka ng tabako sa bulwagan ng Senado (We would like to thank Senate President Enrile and Senator Marcos and Recto because we witnessed how they have fought for the welfare of tobacco farmers in the halls of the Senate),” the farmer leader said.

Lopez said they thought that all was lost for tobacco farmers until Enrile and Marcos vigorously opposed the proposals put forth by Drilon in last night’s plenary debates.