Groups to legislators: The present sin tax law takes care of tobacco farmers

Groups are opposing House Bill No. 4144, which aims to amend Republic Act No. 10351 or the Sin Tax Reform Law by introducing a two-tier tobacco tax system to replace the unitary one.

If implemented, the proposed amendment will impose two different tax rates depending on the classification the cigarettes will fall under. The bill seeks to assess P32 against lower tier or cheaper cigarette products and P36 against premium or more expensive brands.

RA 10351 will impose P30 against all cigarette packs regardless of price and brand beginning 2017 with a 4% increase per year.

The proponents of the bill are saying the suggested amendment will be favorable to farmers, a claim which civil society groups now refute.

“The sin tax reform law already takes care of the welfare of the tobacco farmers.^[1] There is no need for this amendment. The law specifically provides that part of the revenues that will be generated will be used to promote economically viable alternative livelihoods for tobacco farmers and workers. It is therefore wrong to say that the law does not protect our farmers,” the groups stated.

The groups calling for the full implementation the existing sin tax reform law and the unitary tobacco tax system include HealthJustice Philippines, Southeast Asia Tobacco Control Alliance, New Vois Association of the Philippines, Health Futures Foundation, National Anti-Poverty Commission Senior Citizens Sectoral Council, Confederation of Older Persons Association of the Philippines, ANG NARS, and WomanHealth Philippines.

Advocates said that the tobacco industry is exploiting the tobacco farmers.

^[1] SEC. 8. Section 288, subsections (B) and (C) of the National Internal Revenue Code of 1997, as amended by Republic Act No. 9334, is hereby further amended to read as follows:

“(B) Incremental Revenues from Republic Act No. 8240. – Fifteen percent (15%) of the incremental revenue collected from the excise tax on tobacco products under R. A. No. 8240 shall be allocated and divided among the provinces producing burley and native tobacco in accordance with the volume of tobacco leaf production. The fund shall be exclusively utilized for programs to promote economically viable alternatives for tobacco farmers and workers such as:

(1) Programs that will provide inputs, training, and other support for tobacco farmers who shift to production of agricultural products other than tobacco including, but not limited to, high-value crops, spices, rice, corn, sugarcane, coconut, livestock and fisheries;

(2) Programs that will provide financial support for tobacco farmers who are displaced or who cease to produce tobacco;

“3) Cooperative programs to assist tobacco farmers in planting alternative crops or implementing other livelihood projects;

(4) Livelihood programs and projects that will promote, enhance, and develop the tourism potential of tobacco-growing provinces;

(5) Infrastructure projects such as farm to market roads, schools, hospitals, and rural health facilities; and

“6) Agro-industrial projects that will enable tobacco farmers to be involved in the management and subsequent ownership of projects, such as post-harvest and secondary processing like cigarette manufacturing and by-product utilization.”