Ilocos lawmakers urged to support sin tax amendment bill

Posted at 06/22/2009 1:30 PM | Updated as of 06/22/2009 4:01 PM

Lawmakers from the Ilocos region should stop blocking the proposed increase in taxes imposed on sin products like tobacco and liquor, a group of tobacco farmers said Monday.

According to the Solidarity of Peasants Against Exploitations (STOP-Exploitation), the increase would widely benefit poor farmers since Republic Act 7171 or the "Act to Promote the Development of the Farmers in the Virginia Tobacco-Producing Provinces" mandates the allocation of 15 percent of excise taxes onlocally manufactured Virginia Type A cigarettes to the provinces of Ilocos Sur, La Union, Ilocos Norte, and Abra. The law was enacted in 1992.

"If there is anyone that would strongly support the bill, it should be our congressmen because they are the very ones who will reap a bigger share from the taxes. I really could not understand why they are opposing a measure that aims to help us, poor farmers,” Avelino Dacanay, chairman of the Ilocos-based advocacy group,  said in a statement.

Last month, Finance Secretary Margarito Teves urged lawmakers to support revisions to the sin tax law, under House Bill 3759, to enable the government to raise additional revenues.

Authored by Quezon Rep. Danilo Suarez, the bill slaps all brands of cigarettes with a uniform P14 tax per pack. Currently, the Philippines follows a four-tier sin taxation system where the excise tax of low-priced, mid-priced, high-priced, and premium brands varies.

Economic managers are banking on legislated sources of additional revenues to help plug the ballooning budget deficit. Along with the downward revisions in the country's economic growth target, the deficit ceiling was pushed to P250 billion from P199.2 billion.

HB 3759 received intense opposition from pro-tobacco industry congressmen, particularly those from Northern Luzon, who noted the measure would result in job losses among tobacco farmers.

"If we restructure again, it will significantly affect our farmers and our livelihood," Ilocos Sur Rep. Eric Singson said.

STOP-Exploitation, however, belied this claim, saying that only the tobacco companies would be hurt by the tax increase because of a "possible increase in consumption of cigarettes."

"Tobacco farmers' produce will continue to be needed here because local tobacco is still cheaper than imported and the opening up of the export market because of decreasing tobacco production in other countries," Dacanay said.

Instead of opposing moves to amend the sin tax bill, Dacanay said legislators should ensure that the tobacco excise tax goes directly to tobacco farmers.

“If the Congressmen are really out there to protect and advance the interest of their constituents, then they should vote for the passage of the bill as this would mean more revenues for the government that will support the plight of the poor,” he said.


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