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News & Events » Steep Hike in Tobacco Tax Endangers Farmers

Article written by Ryan Ponce Pacpaco, Manila Times (August 6, 2012)

A BILL that provides for 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 Philippine Tobacco Growers Association (PTGA) appealed to the Senate to remove these anti-farmer and anti-worker provisions in the excise tax bill on tobacco and alcohol products approved by the House of Representatives last month.

Saturnino Distor, PTGA president, explained that their harvests are bought by big manufacturers as well as small cigarette makers.

The very high tax of as much as 708 to 1,000 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, Distor noted.

“This is a big dent on our income. How can we recoup our production and operational costs in planting tobacco if we cannot 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.”

In a related development, Elvis Campos of the urban poor group Mamamayan Kilos, Alab ng Maralita, opposed the new version of sin tax measure as they appealed to the senators to seriously scrutinize House Bill (HB) No. 5727. Campos also pointed out that government should instead intensify the campaign against tax leakage in the Bureau of Customs (BoC) by eliminating smuggling and further corruption issues in the government to raise funds.