Deferment of Executive Order on tobacco excise tax sought

MANILA, Philippines - Local officials in tobacco producing provinces asked President Arroyo yesterday to defer implementation of Executive Order 843 giving legislators a big share in the 15 percent local government units (LGUs) are receiving on the excise tax on tobacco products.

In a statement, the Union of Local Authorities of the Philippines (ULAP) condemned the proposed allocation scheme, describing it as “baseless and utterly lopsided” and done without consultation with LGUs.

Aside from the deferment of the implementation of EO 843, Mandaluyong City Mayor Benhur Abalos, ULAP president, also asked the President to thoroughly review the allocation of the 15 percent LGU share on the incremental revenue on excise tax on tobacco products.

“Based on our review of the pertinent documents of the issue, we strongly believe the allocation of said incremental revenue on the excise tax on tobacco products contravenes the original intent of the law,” said Abalos in his two-page letter to Mrs. Arroyo.

Last Nov. 5, the President authorized the release of P6.37 billion in excise tax on tobacco products accumulated from 1997 to 2007 as the 15-percent share of LGUs consisting of provinces, cities and municipalities producing burley and native tobacco products.

Based on Resolution No. 19 of the Congressional Oversight Committee on Comprehensive Tax Reform Program (COCCTRP), a joint circular issued by the Department of Budget, Bureau of Internal Revenue and National Tobacco Corp. prescribed the allocation of the 15-percent share of the LGUs on the incremental revenue collected from excise tax on tobacco products as follows: 80 percent to legislative districts, 10 percent to the provincial government and 10 percent to the cities and municipalities.

In a resolution, local officials stressed that the implementation of development projects in the countryside exclusively belongs to the executive branch of government.

“Legislators should be limited to crafting laws,” the resolution said.

Among its signatories were Camarines Gov. Luis Raymund Villafuerte, Gov. Loreto Leo Ocampos, Vice Gov. Julius Caesar Herrera, and Vice Gov. Jeremias Singson.

Abalos expressed hope that Mrs. Arroyo would consider their request.   – Non Alquitran