Tobacco-producing provinces to have P15.8-B tax share

TOBACCO-producing provinces are getting a combined P15.8 billion in 2018 as their annual share of the national government’s excise tax collections from Virginia, Burley and native tobacco, Surigao del Sur Rep. Johnny Pimentel said.

“The amount is roughly four times more years ago and this can only be attributed to higher tax collections, since tax rates on tobacco products have been increasing every year since 2013,” Pimentel, chairman of the House good government and public accountability committee, said.

The committee has been digging into Ilocos Norte Gov. Imee Marcos’ alleged misuse of P66 million in tobacco monies spent on vehicles for the provincial government, rather than for projects to make tobacco farmers self-reliant, as required by law.

“In the P3.767-trillion national budget for 2018, provinces cultivating Virginia tobacco are getting P12.88 billion, while those growing Burley and native tobacco are getting another P2.92 billion,” Pimentel said.

Based on National Tobacco Administration records, Pimentel said only four provinces – Ilocos Sur, Ilocos Norte, La Union and Abra – produce Virginia tobacco.

The top growers of Burley and native tobacco are the provinces of Isabela, Pangasinan and Cagayan, although La Union, Ilocos Sur and Ilocos Norte also produce a

Pimentel added, the smaller growers of Burley and native tobacco include Abra, Nueva Vizcaya, Occidental Mindoro, Tarlac, Misamis Oriental, Maguindanao and North Cotabato.

The tobacco-producing provinces’ share of tobacco tax revenues has been controversial since 2000, when then President Joseph Estrada was impeached, partly over accusations he pocketed P130 million from Ilocos Sur’s allocation.

- man has filed several charges against provinces for allegedly misappropriating portions of their allotments.

Under a 1992 law, provinces producing an annual average of not less than one million kilos of Virginia tobacco are entitled to 15 percent of the excise tax collections from locallymanufactured Virginia-type cigarettes.

Each province’s share is then apportioned as 30 percent to the provincial government; 40 percent to the municipal or city governments and 30 percent to congressional districts.

The money may only be used to advance the self-reliance of tobacco farmers through

Cooperative, livelihood, agro-industrial and infrastructure projects.

Under two separate laws, provinces producing Burley and native tobacco are 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.

The money may only be “exclusively utilized for programs to promote economically viable alternatives for tobacco farmers and workers.

Under a 2012 law, effective January 1 this year, the tax on all cigarettes packed by machine was jacked up to P30 per 20-stick pack.

Effective January 1, 2018, the P30 tax per pack will increase by four percent, and thereafter, by another four percent every year.