TWO former Cabinet secretaries on Sunday led farmers and the labor sector in calling on the members of the bicameral panel tasked to finalize the TRAIN bill to take into consideration their plight before making another round of “painful” increase in the tobacco excise tax.
Former Labor secretary Ruben Torres, TUCP president, and former Agriculture secretary Leonardo Montemayor said the farmers were yet to recover from the imposition of the sin tax law.
The Trade Union Congress of the Philippines, PhilTobacco Growers Association and the Federation of Free farmers are objecting to the plan to again raise the tobacco excise, tax citing the significant drop in crop production, the reduction in the size of the farmlands planted to tobacco and the loss of jobs following the big annual increases in the tobacco tax since 2013.
In separate letters to Senator Juan Edgardo Angara, chairman of the Senate committee on ways and means, the groups aired their concern that any drastic increase would be damaging to the economic situation of the tobacco farming and labor sectors.
“What the proponents of a radical increase in the sin tax fail to recognize is that every time a move to increase the tobacco sin tax is proposed, thousands of tobacco farmers and laborers are faced with the threat of losing their primary source of income and livelihood,” wrote Torres.
In 2015 alone, Torres said, data from the National Tobacco Administration showed the number of workers in the tobacco industry was reduced by 9,232 farmers. Another related NTA report showed there had also been a decline in the area of land planted to tobacco, or from 38,264 hectares in 2014 to only 32,761 hectares in 2015″•a reduction of more than 5,500 hectares.
He said the fall in employment was supported by the latest Labor Force Survey of the Philippine Statistics Authority, which showed an increase in the country’s unemployment rate of from 5.8 percent in January of 2016 to 6.6 percent in January of 2017, or 2.8 million unemployed.
The Ilocos, a tobacco-farming region, registered the highest unemployment rate of 8.7 percent.
Torres said the TUCP was supporting the call of various farmers’ organization in opposing the inclusion of the tobacco tax in Package 1 of the TRAIN bill.
The tobacco industry has nearly 3 million Filipinos engaged in the production, trading, processing and marketing of tobacco and tobacco products.
The TUCP has 1.2 million members and is the largest confederation of labor federations in the Philippines.
PTGA president Saturnino Distor said tobacco farmers were still struggling with the continuing fall in demand for tobacco because of the 340-percent excise tax increases introduced in 2013.
Under the current law, tobacco taxes will automatically increase by 4 percent annually.
Meanwhile, tobacco production has fallen from 68 million kilograms in 2013 to 52 million kilograms in 2015, according to the National Tobacco Administration.”
The PTGA has a membership of 50,000 tobacco farmers across the country.
“Why is tobacco being targeted again? Tobacco excise taxes contributed around P100 billion in 2015, up from P32 billion in 2012. The tobacco sector is giving more than our fair share of the tax revenues for the government,” Distor said.
“We are aware that the yearly increases in tobacco taxes resulted in lower demand for tobacco since RA 10351 was implemented, thus, a full assessment of the implementation must be done first before amending the tax system again,” Montemayor said.