THE excise tax share that tobacco-producing local government units (LGUs) would receive this year would be at P21 billion, about 10.52-percent higher than the P19 billion they received last year, according to the Department of Budget and Management (DBM).
In a recent local budget memorandum, Budget Secretary Amenah F. Pangandaman outlined the guidelines on the release and utilization of the tobacco excise taxes by LGUs.
For this year’s utilization, the LGUs would be receiving their share from the tobacco excise taxes collected by the national government in 2021 and prior years.
The memorandum stipulated that the LGUs would be receiving a total of P21 billion in excise tax share, which is the limit stipulated under prevailing rules and regulations.
Under Republic Act 11346, LGUs where Virginia tobacco is grown are entitled to receive 15 percent of the total excise tax collection on locally manufactured Virginia-type cigarettes. However, their share must not exceed P17 billion.
Meanwhile, 5 percent of the excise taxes collected from tobacco products will be allocated and divided among LGUs producing burley and native tobacco. The total share shall not exceed P4 billion.
The DBM memorandum indicated that the Virginia tobacco-growing LGUs would receive P17 billion this year while burley and native tobacco-producing LGUs would get the maximum P4 billion.
Last year, total excise taxes earmarked to tobacco-producing LGUs reached P19 billion.
“The programs and projects to be implemented by the beneficiary LGUs from their respective shares from tobacco excise taxes shall be included in their respective duly approved local development investment programs and annual investment programs,” Budget Memorandum 89 read.
The DBM also reminded the LGUs that their programs and projects must be aligned with the policies set by the national government such as the Agricultural and Fisheries Modernization Program and the roadmap for the Philippine Tobacco Industry.
The memorandum indicated that the P17 billion excise taxes from Virginia tobacco would be allocated to four provinces based on their respective volume of production. Ilocos Sur would receive the highest LGU share at P10.407 billion.
For the P4-billion burley and native tobacco excise taxes allocation, 16 LGUs would receive allotments led by Isabela, which will get P2.027 billion in funds.