Tobacco farmers wary over new cigarette tax

MANILA, Philippines - Tobacco farmer groups lauded Antique Rep. Exequiel Javier, chairman of the House ways and means committee, for taking the cudgels on their behalf and the two million Filipinos who depend on the tobacco industry for their livelihood.

At the same time, the Immayos Farmers Association (IFA) and the Samara Farmers Associations (SFA) called on Congress to reject proposals to adjust excise tax on cigarettes for the sake of the thousands of tobacco farmers and their families who will be most affected if current excise tax rates are increased.

“We are already hard up. If they raise taxes on cigarettes, we may all lose our livelihood. Our family will suffer,” IFA said.

SFA echoed IFA’s sentiments as the group appealed to Javier to continue helping the tobacco farmers. “We need his voice in Congress. We hope that other legislators will be considerate,”the group said.

IFA and SFA have every reason to fear. Labor Secretary Marianito Roque said up to 300,000 people could lose their jobs locally over the next six months as the global financial crisis deepens. Some 15,000 had already been laid off over the past two months, while 19,000 others had their work week cut to four days or less.

Only in January this year, excise taxes on alcohol and tobacco products were adjusted again in accordance with Republic Act 9334, also known as the new Excise Tax Law, which was signed into law in December 2004.

The excise tax for cigarette products increased by six percent and for distilled spirits and liquor, by eight percent. Should Congress amend RA 9334 this year, taxes on cigarettes and liquors would be adjusted twice in one year.

Javier has expressed reservations over proposals in Congress to raise taxes on tobacco and alcohol at a time when people and companies are reeling from the global financial crisis.

“We are the only country that is increasing taxes while others are providing economic stimulus, providing bailouts and tax relief because of the economic crisis,” Javier said in a recent congressional hearing.

Javier also appealed to bill proponents and the Department of Finance (DOF) “not to tax to death” the cigarette and alcohol industry.

Instead, he urged the DOF to provide economic stimulus through indirect measures than directly raising taxes which will ultimately affect the ordinary taxpayers.