Tobacco farmers urge Congress to pass new tobacco tax measure

Tobacco farmers belonging to Solidarity of Peasants Against Exploitation (STOP-Exploitation) based in the Ilocos region urged their congressmen to support the bill that seeks to modify the taxes imposed on tobacco and liquor in the country.

Avelino Dacanay, Chairman of STOP-Exploitation also urged the legislators coming from the Northern Luzon provinces to stop blocking the proposed increase in tobacco taxes and instead ensure that the allocation of tobacco-producing provinces from tobacco excise tax goes directly to tobacco farmers.

“If there is anyone that would strongly support the bill, it should be our congressmen because they are the very ones who will reap a bigger share from the taxes. I really could not understand why they are opposing a measure that aims to help us, poor farmers,” Dacanay said.

Republic Act 7171 allows the allocation of 15 percent of excise taxes on locally manufactured Virginia-type of cigarettes to Virginia tobacco producing provinces

In a statement sent to the media, the tobacco farmers group also belied the claim of other groups of farmers and traders that another adjustment in the current taxation scheme will jeopardize the livelihood of tobacco farmers.

“Only the tobacco companies would likely be hurt by the increase in tobacco taxes because of possible decrease in consumption of cigarettes. Meanwhile, tobacco farmers’ produce will continue to be needed here because local tobacco is still cheaper than imported and the opening up of the export market because of decreasing tobacco production in other countries,” explained Dacanay.

The proposal of the Department of Finance to reform the taxation scheme in tobacco and liquor and increase government revenue through these “sin products” is getting intense opposition from the legislators in Northern Luzon and successfully stalled its passage in the House of Representatives until the break this month.

Dacanay theorized that the opposition to the new tax scheme is mainly due to the lobbying of the local and international tobacco companies in Congress.

“If the Congressmen are really out there to protect and advance the interest of their constituents, then they should vote for the passage of the bill as this would mean more revenues for the government that will support the plight of the poor,” said Dacanay.

Data from STOP-Exploitation found rising buying price of tobacco leaves from 2007 to this year despite the increase in tobacco taxes in 2007 and 2009.

The excise tax of cigarettes priced at P6.50 to P10 was P10.35 in 2005, P10.88 in 2007 and P11.43 in 2009. Tax imposed on cigarettes priced above P10 was P25 in 2005, P26.06 in 2007 and P27.16 in 2009.

The farmers reported that the average buying price of Class AA tobacco leaves in 2007 was P72-80 and rose to P85 per kilo in 2008. The prices further increased to P90 during harvest this year. The same was apparent for burley tobacco that soared to P120 per kilo from P100 last year.

“Whatever alarm raised by the tobacco companies was apparently belied by our very own experiences during the implementation of the existing tax measure. The traders and tobacco companies even bought this year the tobacco leaves which were already classified as REJECTS,” explained Dacanay.

STOP-Exploitation now has 10,000 individual members in La Union, Ilocos Sur, Ilocos Norte and Abra.(30)