THE chairman of the House Committee on Good Government and Public Accountability on Monday said shares of tobacco-producing provinces from the national government’s excise-tax collections will reach P15.8 billion in 2018.
However, in a statement, Surigao del Sur Rep. Johnny Pimentel said the share of provinces from the taxes should only be used for certain projects that will promote the welfare of tobacco farmers.
The Office of the Ombudsman has filed several charges against various local officials of tobacco-growing provinces for allegedly misappropriating portions of their allotments.
“The amount [P15.8 billion] is roughly four times greater than the P3.99 billion they got five years ago, and this can only be attributed to higher tax collections, since tax rates on tobacco products have been increasing every year since 2013,” Pimentel said.
Under the “sin” tax law, effective January 1 this year, the tax on all cigarettes packed by machine was jacked up to P30 per 20-stick pack.
Effective January 1, 2018, the P30 tax per pack will increase by 4 percent, and another 4 percent every year thereafter.
“In the P3.767-trillion national budget for 2018, provinces cultivating Virginia tobacco are getting P12.88 billion, while those growing Burley and native tobacco are getting another P2.92 billion,” Pimentel added.
Pimentel, citing Based on National Tobacco Administration records, said only four provinces—Ilocos Sur, Ilocos Norte, La Union and Abra—produce Virginia tobacco.
He said the top growers of Burley and native tobacco are the provinces of Isabela, Pangasinan and Cagayan, although La Union, Ilocos Sur and
Ilocos Norte also produce a significant volume of this variety.
The lawmaker said the smaller number of growers of Burley and native tobacco includes Occidental Mindoro, Tarlac, Misamis Oriental, Maguindanao, Abra, North Cotabato and Nueva Vizcaya.
“How much exactly each province will get is still subject to certification of actual leaf-production volume, plus certification of actual excise-tax collections and remittance to the Bureau of Treasury,” Pimentel said.
Under Republic Act 7171, provinces producing an annual average of not less than 1 million kilos of Virginia tobacco are entitled to 15 percent of the excise-tax collections from locally manufactured Virginia-type cigarettes.
Of the provinces’ share, 30 percent will go to the provincial government; 40 percent to the municipal and city governments; and 30 percent to the congressional districts.
The fund, however, may only be used to advance the self-reliance of tobacco farmers through cooperative projects; livelihood projects that develop alternative-farming systems to boost the income of farmers; agro-industrial projects that enable farmers to engage in postharvest ventures, such as cigarette manufacturing and by-product utilization; and infrastructure projects, such as farm-to-market roads.
Meanwhile, provinces producing Burley and native tobacco are entitled to “15 percent of the incremental revenue collected from the excise tax on tobacco products” as a result of higher tax rates way back in 1997.
Also, the said shares from tobacco taxes may only be “exclusively utilized for programs to promote economically viable alternatives for tobacco farmers and workers, such as 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; programs that will provide financial support for tobacco farmers who are displaced or who cease to produce tobacco; cooperative programs to assist tobacco farmers in planting alternative crops or implementing other livelihood projects.
The fund may also be used for livelihood programs and projects that will promote, enhance and develop the tourism potential of tobacco-growing provinces; infrastructure projects, such as farm-to-market roads, schools, hospitals and rural-health facilities; and agro-industrial projects that will enable tobacco farmers to be involved in the management and subsequent ownership of projects, such as postharvest and secondary processing like cigarette manufacturing and by-product utilization.