MANILA, Philippines - Tobacco farmers lauded President Aquino and Finance Secretary Cesar Purisima for retaining the current excise tax rate on tobacco products, saying the move would further stimulate the growth of the farm sector as well as generate revenues for the government.
Excise tax collections on tobacco products already reached P11.9 billion during the first half of this year compared to only P8.4 billion during the same period last year, according to the Bureau of Internal Revenue (BIR).
“This proves that the current excise tax system works,” said farmers, who belong to the the Immayos Farmers Association (IFA), the Samara Farmers Associations (SFA), the Itawes Foundation, and the Philippine Association of Tobacco-based Cooperatives (Patco).
“Any changes to the current excise tax law may result to lower revenue collections,” they said.
The farmers were referring to Republic Act 9334, or the excise tax law on alcohol and tobacco products. This law requires an increase in tax rates every two years beginning 2005. The last tax adjustment was in 2009, and another is in the offing on Jan. 1, 2011.
The farmers said that it would be best to follow this law rather than introduce amendments — the result of which could spell disaster to tobacco farming communities.
“A hike in the excise tax may result in a lower demand for cigarettes, which would lead local cigarette manufacturers to cut down their purchases of tobacco leaf,” they said.
“A decrease in the demand for homegrown tobacco will then demolish the livelihood of tobacco farmers and will cause loss of jobs among workers under the farmers’ employ, which is contrary to the policy of the State to increase job generation.
“Also, there will be loss of jobs in the manufacturing sector, the tobacco-buyer sector, and within the government as well,” they said.
The National Tobacco Administration (NTA) said there are some 2.7 million Filipinos dependent on the tobacco industry compared to only 1.9 million last year.