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Friday, March 29, 2024

Tobacco provinces get P15-b bonus

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Tobacco-producing provinces are getting a combined P15.8 billion in 2018 as their annual share of the national government’s excise tax collections from Virginia, Burley and native tobacco, Surigao del Sur Rep. Johnny Pimentel said on Monday.

“The amount is roughly four times greater than the P3.99 billion which they got five years ago, and this can only be attributed to higher tax collections, since tax rates on tobacco products have been increasing every year since 2013,” said Pimentel, chairman of the House good government and public accountability committee.

Pimentel’s committee has been digging into Ilocos Norte Gov. Imee Marcos’ alleged misuse of P66 million in tobacco monies spent on vehicles for the provincial government, rather than for projects meant to reinforce the self-reliance of tobacco farmers, as required by law.

“In the P3.767-trillion national budget for 2018, provinces cultivating Virginia tobacco are getting P12.88 billion, while those growing Burley and native tobacco are getting another P2.92 billion,” Pimentel said.

Based on National Tobacco Administration records, Pimentel said only four provinces—Ilocos Sur, Ilocos Norte, La Union and Abra—produce Virginia tobacco.

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The top growers of Burley and native tobacco are the provinces of Isabela, Pangasinan and Cagayan, although La Union, Ilocos Sur and Ilocos Norte also produce a significant volume of the same, Pimentel said.

He said the smaller growers of Burley and native tobacco include Occidental Mindoro, Tarlac, Misamis Oriental, Maguindanao, Abra, North Cotabato and Nueva Vizcaya.

“How much exactly each province will get is still subject to certification of actual leaf production volume, plus certification of actual excise tax collections and remittance to the Bureau of Treasury,” Pimentel said.

The tobacco-producing provinces’ share of tobacco tax revenues has become controversial since 2000, when then President Joseph Estrada was impeached, partly over accusations he pocketed P130 million from Ilocos Sur’s allocation.

Since then, the Office of the Ombudsman has filed several charges against various local officials of tobacco-growing provinces for allegedly misappropriating portions of their allotments.

Under a 1992 law, provinces producing an annual average of not less than one million kilos of Virginia tobacco are entitled to 15 percent of the excise tax collections from locally-manufactured Virginia-type cigarettes.

Each province’s share is then apportioned as follows: 30 percent to the provincial government; 40 percent to the municipal and city governments; and 30 percent to the congressional districts.

The money may only be used to advance the self-reliance of tobacco farmers through (1) projects meant to improve product quality, raise productivity, grow market share and as a whole increase the income of farmers (2) Livelihood projects that develop alternative farming systems to boost up the income of farmers (3) Agro-industrial projects that enable farmers to engage in post-harvest ventures such as cigarette manufacturing and by-product utilization; and (4) Infrastructure projects such as farm-to-market roads.

Under two separate laws, provinces producing Burley and native tobacco are entitled to “15 percent of the incremental revenue collected from the excise tax on tobacco products” as a result of higher tax rates way back in 1997.

The money may only be “exclusively utilized for programs to promote economically viable alternatives for tobacco farmers and workers such as, Programs that will provide inputs, training, and other support for tobacco farmers who shift to production of agricultural products other than tobacco including, but not limited to, high-value crops, spices, rice, corn, sugarcane, coconut, livestock and fisheries; programs that will provide financial support for tobacco farmers who are displaced or who cease to produce tobacco; cooperative programs to assist tobacco farmers in planting alternative crops or implementing other livelihood projects; livelihood programs and projects that will promote, enhance, and develop the tourism potential of tobacco-growing provinces; infrastructure projects such as farm to market roads, schools, hospitals, and rural health facilities and agro-industrial projects that will enable tobacco farmers to be involved in the management and subsequent ownership of projects, such as post-harvest and secondary processing like cigarette manufacturing and by-product utilization.”

Under a 2012 law, effective January 1 this year, the tax on all cigarettes packed by machine was jacked up to P30.00 per 20-stick pack.

Effective Jan. 1, 2018, the P30.00 tax per pack will increase by four percent, and thereafter, by another four percent every year.

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