A group of more than 50,000 tobacco farmers urged the government to reconsider its plan to increase again the excise tax on cigarettes, saying the move would further harm the industry.
The PhilTobacco Growers Association Inc. said in a letter to Finance Secretary Carlos Dominguez III on Oct. 30 that they were already feeling the adverse impact of the lower demand for tobacco caused by higher excise taxes on tobacco products.
The letter was also sent to Senate ways and means committee chairman Senator Juan Edgardo Angara, and House ways and means committee chairman Rep. Estrellita Suansing.
The farmers said that from P2.72 per pack in 2012 for the cheaper cigarette, the excise tax now reached P35 per pack.
Latest data from the National Tobacco Administration showed that tobacco production significantly declined to 48 million kilograms in 2017 from 68 million kilograms in 2013 following the successive excise tax increases in tobacco products.
“We were surprised that aside from the tax increase in tobacco in 2013 under RA 10351, it was again increased in 2017 under RA 10963,” the farmers said. “And now the government is again planning to increase the tax on cigarettes,” they said.
The farmers said the proposal of Senator JV Ejercito to impose an excise tax of P90 per pack with a 9-percent increase annually would more than double the current tax of P35 per pack.
“We don’t really know what direction the government wants for the industry that benefits more than three million Filipino families. PTGA members and their families for decades have been depending on tobacco for their livelihood,” the farmers said.
The farmers said they were supporting the goal of President Rodrigo Duterte to further spur the economy, and tobacco farmers also belong to millions of Filipinos whom Duterte wanted to extricate from poverty.
“The tobacco industry contributes billions of pesos yearly to government coffers,” they said, citing the Bureau of Internal Revenue’s tobacco tax collections in 2017 that reached over P126 billion.
“Because of that, isn’t it right that we should be given the opportunity to recover? Isn’t it right that other sectors should also be encouraged to pay higher taxes for them to contribute to economic development?” the farmers said.
The Department of Health and other sectors were pushing for the increase in excise tax of cigarettes to P90 per pack to fund the Universal Health Care bill.
The UHC seeks to establish a healthcare system that provides health services to every citizen.