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News & Events » Tobacco Growers Ask Senate to Recall Provision

Article written by Christina M. Mendez, The Philippine Star (August 6, 2012)

MANILA, Philippines - As the Senate gears up to conduct public hearings this week on the Sin Tax bill, the Philippine Tobacco Growers Association (PTGA) reiterated yesterday its appeal to the Senate to reconsider provisions that may affect tobacco farmers and workers.

The PTGA said the steep tax increases on locally produced cigarettes will wipe out a considerable percent of farmers’ incomes from tobacco growing and threaten the livelihood of hundreds of thousands of factory workers dependent on the industry.

The Palace-backed Sin Tax bill is expected to bring in over P30 billion in additional revenues from higher liquor and cigar taxes.

In a statement, PTGA president Saturnino Distor said the very high tax of as much as 708 to 1000 percent on low-priced cigarette brands, which small manufacturers make, will price these products out of the market, leaving the farmers with no market to sell a significant volume of their annual production.

“This is a big dent on our income. How can we recoup our production and operational costs in planting tobacco if we can not sell all our produce?,” he asked. “We appeal to the Senate to correct the grossly unfair and inequitable provisions in the House tax bill, which threatens the survival not only of tobacco farmers, but of the millions of others dependent on the tobacco industry.” – With Rainier Allan Ronda

He explained that the harvest are bought by big manufacturers as well as small cigarette makers.
Distor expressed skepticism on the government’s estimate that new entrants in the tobacco industry would buy three million kilos of local tobacco leaf, noting that this makes up a measly 2.4 percent of total production of almost 80 million kilos last year.

“We cannot understand the government’s logic of taking away the only source of our income, just to accommodate a new investor who buys only a minimal percentage of our produce,” he stressed.

Sen. Ralph Recto, chairman of the Senate committee on ways and means, is scheduling a public hearing on the Sinx Tax measure on Thursday this week. Finance Sec. Cesar Purisima and the affected stakeholders will be invited in the public hearing. “It is our duty to pass the tax measure,” Recto said.

Recto added that he hopes to come out with a committee report on the Senate version of the sin tax bill by September, so that a plenary vote to approve the measure can be called by October for the legislation to be submitted for signing into law by President Aquino before the yearend.

Senate President Juan Ponce Enrile earlier indicated that the sin tax bill will still undergo thorough scrutiny at the Senate. “It is a difficult bill. It is going to be bloody. It will take long deliberations,” Enrile said.
Meanwhile, an urban poor group lambasted the government’s planned imposition of “excessive” taxes on low-priced tobacco brands and beer products as “anti-poor.”

Elvis Campos of Mamamayan Kilos, Alab ng Maralita said the Senate should be “extra cautious” in considering House Bill 5727, otherwise known as the excise tax bill, due to the measure?s adverse impact on poor consumers.

While he lauded government efforts in upgrading delivery of basic services, he said there are other ways of raising revenue other than squeezing more taxes from the poor and marginalized.

Collection efficiency, curbing corruption and smuggling prevention are but a few means of raising government revenue without adding more burden to poor Filipinos),” Campos stressed.

Under the bill of Cavite Rep. Joseph Emilio Abaya, tax on low-priced cigarettes will increase by more than 700 percent compared to premium brands whose tax will only increase by 150 percent.

If before low-priced cigarettes sell for P5 to P10, under the Abaya bill this will go up to P25 to P30 per pack? he stressed.

He said the steep increase in taxes on low-priced brands is unfair to poor consumers, who should have the same, if not equal right, to avail of these products as rich smokers and drinkers. – With Rainier Allan Ronda