Tobacco growers to get P6 billion windfall from sin tax bill

By Ma. Cristina C. Arzadon PIA 1 Ilocos Norte)

 

LAOAG CITY, Nov. 15 (PIA) — Contrary to tobacco farmers’ perception, the sin tax reform bill will provide additional P6 billion to the tobacco industry, said Sen. Franklin Drilon, a proponent of Senate Bill 3249.

Speaking on Bombo Radio network news on Wednesday (November 14), Drilon dismissed fears that the sin tax bill will spell the death of the tobacco industry in the provinces of Ilocos Norte, Ilocos Sur, La Union and Abra, considered the Virginia tobacco-growing provinces based on the National Tobacco Administration’s list of growers.

Farmers in these provinces recently held rallies to oppose the passage of the sin tax bill noting that higher taxes would mean fewer consumers will be able to afford higher cigarette costs.

But Drilon said farmers will get P6 billion more on top of the P4 billion that farmers are already getting under R.A. 7171 or an act promoting the development of Virginia tobacco farmers.

“Tobacco growers are assured of a 15 percent-share from tobacco tax collections which translates to P6 billion more to the industry. These funds can be used by farmers to expand their crop production like corn, garlic and rice,” he said.

“This means additional P10 billion funds to tobacco growers with the passage of the sin tax,” Drilon said.

Under Drilon’s proposal, the government expects to generate from P40 to P45 billion of tax collections from cigarettes and alcohol. Of the expected revenue collection, P25 billion will come from cigarettes and P15 billion from alcohol.

He said the sin tax bill is both a revenue and health measure because it seeks to reduce cigarette consumption among Filipinos.

Citing a study, Drilon said 17 million Filipinos are smoking more than 10 tobacco sticks a day causing 80,000 deaths every year.

Drilon noted that the Filipinos have easier access to cigarettes than their Asian counterparts because the Philippines has the cheapest cost of tobacco.

“This is the reason why our poorer citizens are most afflicted because they can easily afford to buy cigarettes,” he said.

Drilon said Philippine cigarettes will still remain the cheapest among Asian countries like Thailand, Indonesia, Singapore, Malaysia and Japan even if the government succeeds in increasing taxes.

He said once the bill is passed, 50 million Filipino families will be assured of health insurance under the Philhealth system noting that P23.5 billion from the tax collections will go to universal health care.

According to Drilon, tobacco growers will not feel the effects of reduced consumption of cigarette in the Philippines because only 15 percent of tobacco production is consumed locally while 85 percent are being sent abroad as export citing a report of the National Tobacco Administration.#