DA chief opposes hike in tobacco tax

MANILA—Agriculture Secretary Emmanuel “Manny” Pinol opposes a Lower House measure that introduces big increase in tobacco tax on the ground that it would burden much farmers.

“The DA supports the position of the tobacco farmers,” Pinol said in a text message to reporters.

“I will direct the NTA (National Tobacco Administration) administrator to explain why the agency is taking a position which is not supported by stakeholders,” he added.

The DA chief’s pronouncement came after reports said that the NTA, an attached agency of the DA, supports House Bill 4144, which seeks to impose a higher sin tax on cigarettes by amending provisions of the Republic Act of 10351 or the Sin Tax Reform Law of 2012.

House Bill 4144, authored by Rep. Eugene Michael de Vera of Arts, Business and Science Professionals Party-list, proposes to keep the present regime of two tax rates on cigarettes based on their retail prices.

HB 4144 proposes a new tax rates of Php 32 per pack for cigarettes with a retail price of up to Php 11.50, and Php 36 for those selling above Php 11.50 per pack.

The proposed measure was approved on third and final reading by the House of Representatives on Dec. 13, 2016.

At present, the government imposes a unitary sin tax rate on tobacco of Php 30 per pack regardless of brand, with an annual 4-percent adjustment thereafter, as indicated in the Sin Tax Reform Law of 2012.

Around 50,000 tobacco farmers belonging to the Philippine Tobacco Growers Association (PTGA) and the Philippine Aromatic Tobacco Development also oppose HB 4144.

“Tobacco farmers are struggling with the decline in demand for tobacco because of the huge 340-percent excise tax increases introduced in 2013, with annual increases of 20 percent or more,” said Saturnino Distor, PTGA leader, in a statement.

Other government agencies such as the Department of Finance (DOF), the Bureau of Internal Revenue (BIR), the National Tax Research Center and the Department of Health (DOH) have also expressed opposition to the proposed bill.

The DOF said a two-tier tax system on tobacco would be difficult to administer compared to a unitary one.

Both the DOF and DOH noted that a two-tier tax system would not generate more revenues for the government as consumers would just shift to buy low-priced cigarettes from the expensive ones.