NGO urges Congress to reject new cigarette tax

MANILA, Philippines - A non-governmental organization (NGO) has joined the growing clamor for Congress to reject proposals to increase the excise tax on tobacco products to spare from further economic woes the more than two million tobacco farmers, their families, and other dependents on the industry who will be most affected if the current excise tax rates are adjusted.

Lawyer Vicente Lasam, president of Itawes Foundation based in Tuguegarao, said the legislators should support Antique Rep. Exequiel Javier, chairman of the House ways and means committee, who expressed his opposition to raising the excise tax on cigarettes for the second time in a year. Cigarette excise taxes were raised last Jan. 1, 2009.

Several lawmakers have voiced similar objection. Camarines Norte Rep. Liwayway Vinzons-Chato said if the government wishes to raise revenues, it should first curb the rampant smuggling of cigarettes. Rep. Rufus Rodriguez and Isabela Rep. Giorgidi Agabao said in this time of global economic recession government should not be increasing taxes and should instead leave money in people’s pockets.

“We are hoping that Congress will seek other ways to enhance revenue collection. If taxes on cigarettes are raised, the two million Filipinos who depend on the tobacco industry for their livelihood will be the ultimate losers,” Lasam pointed out.

The Itawes Foundation, which assists tobacco farmers through various programs, will be actively voicing their concern on the proposed excise tax hike on cigarettes.

“We fear for the tobacco farmers. They are hard up as it is. They don’t need another burden,” Lasam added.

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

The lawmaker 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.

Earlier, the Immayos Farmers Association (IFA) and the Samara Farmers Associations (SFA) also 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.