PTGA - Phil Tobacco Growers Association, Inc.

Promoting, Developing and  Protecting the Tobacco Growers Industry of the Philippines

Join us on:

  • Facebook
  • Twitter
  • YouTube

News & Events » Farmers to Senators: Consider our Families

Article written by Jefferson Antiporda

LOCAL tobacco farmers have expressed optimism that the members of the Senate would be more considerate in handling a legislative measure that provides for steep tax increases on locally produced cigarettes, especially the negative effects of the bill on the livelihood of thousands of tobacco growers and their families.

The Philippine Tobacco Growers Association (PTGA), in a statement, at the same time appealed to the Senate to remove what they claimed to be anti-farmer and anti-worker provisions in the excise tax bill on tobacco and alcohol products (sin tax bill) approved by the House of Representatives last month.

Saturnino Distor, PTGA president, said that the proposed legislature 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.

Their harvest, Distor said, are bought by big manufacturers as well as small cigarette makers and 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.

The group is appealing 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.

Distor also expressed doubts on the government’s estimate that new entrants in the tobacco industry would buy three million kilos of local tobacco leaf, noting that such figure only makes up a measly 2.4 percent of total production of almost 80 million kilos last year.

An organization of workers also made a similar appeal to the Senate, pointing out that the workers em-ployed by small cigarette manu-facturers such as La Suerte, Mighty Corp. and the Associated Anglo-American Tobacco Corp. would be the first to be directly hit by the House tax proposal.

Hilario Punzalan, president of the National Federation of Labor Unions (Naflu) also expressed concern over the possible increase of smuggled and counterfeit cigarettes in the country because of the bill.

As it is, cigarette smuggling is happening and even government officials and economists agree that the incidence of a flourishing black market is likely to increase, the group added.

Farmers’ and workers’ groups have strongly opposed the excise tax bill approved by the House, which taxes low-priced cigarettes at 708 percent; mid-priced brands at 297 percent and high-priced brands at 150 percent by 2014. Cigarettes in the low-priced tier currently taxed at P2.72 per pack will pay P12 in 2013 and P22 in 2014. Mid-priced brands now paying P7.56 in tax and high-priced brands paying P12 will both be taxed P28.30 in 2013 and P30 in 2014 under the House version.

Premium imported brands will enjoy a tax holiday on the first year of the bill’s implementation and a measly 6 percent tax increase in 2014.

To compensate for the excessively high taxes, small cigarette manu-facturers would have to price their brands at rates equal to those of imported premium brands that only the rich can afford.