Ilocos farmers yet to benefit from tobacco taxes

CANDON CITY, Ilocos Sur, Philippines —  More than 35,000 tobacco farmers in the Ilocos region continue to suffer and bury in debt despite the billions of pesos in tobacco excise taxes handed to local government units.

According to the Department of Budget’s Memorandum 71 to 73, about P10.72 billion has been received by Ilocos region provinces from its share of the excise taxes from tobacco.

Ilocos Sur, Ilocos Norte and La Union received a total of P9.11 billion for the 359 million kilograms of tobacco produced in 2013.

Based on data from the Department of Finance, around P91.6 billion was collected from tobacco in 2016 and at least P120.66 billion in 2017.

 Despite the huge taxes coming from the industry, however, tobacco farmers have yet to benefit from the local government’s share of the tobacco excise tax.

Zaldy Alfiler,  leader of the Solidarity of Peasants Against Exploitation,  said  tobacco farmers face unending troubles as these billions of funds are often misused.

Alfiler said  when tobacco farming is at its peak,  troubles also peak. He noted that thousands of lowly tobacco farmers dream of good harvest from their daily toils of growing the best tobacco leaves.

“Tobacco farmers cry for despair ‘while middlemen and trading centers have a hearty laugh. Prices are low while price manipulation through downgrading, underweighing, and threats of stop buying (Semana Santa syndrome) continue, he said.

Under Republic Act 7171, tobacco-producing provinces like Ilocos Norte with an annual average production of not less than one million kilos of Virginia tobacco,  are entitled to 15 percent of the excise tax collections from the locally manufactured Virginia-type cigarette.

Burley and native tobacco producing-provinces are also 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.

Of the total amount, 30 percent goes to the provincial government, 40 percent to the municipal or city government and 30 percent to congressional districts.

The law further states the money shall be utilized exclusively for programs to advance the self-reliance of tobacco farmers through cooperative, livelihood, agro-industrial and infrastructure development like farm-to-market roads.

Ilocos Norte is under investigation by the House Committee on Good Government and Accountability for its alleged misuse of PP66 million tobacco funds for the purchase of multicabs.

Tobacco farmers are demanding the National Tobacco Administration (NTA) to be on its toes “to ensure that all projects funded by RA7171 directly benefit farmers.

They are also urging the NTA to immediately resolve the unfair contract farming provisions imposed by trading centers and tobacco companies. 

“Instead of pushing for corruption-ridden agro-industrial structures and token livelihood projects, the NTA should instead throw its support to our proposal for direct monetary incentives and zero-interest loans for farmers chargeable to LGU excise tax shares.”