To­bacco grow­ers wor­ried by lat­est tax hike bill

Sun.Star Cagayan de Oro - - Business -

The Philip­pine To­bacco Grow­ers As­so­ci­a­tion Inc. (PTGA) on Tues­day ex­pressed grave con­cern over the pro­posed in­crease in ex­cise taxes on to­bacco, say­ing the bat­tery of taxes is killing the lo­cal in­dus­try.

In a state­ment sent to the Philip­pines News Agency, the PTGA said cig­a­rette taxes “have gone up seven times in the last five years. This has di­rectly im­pacted our pro­duc­tion and caused the dis­place­ment of a lot of farm­ers.”

Higher prices have led to a lot of coun­ter­feit cig­a­rettes and these are com­ing mostly from China and do not use Philip­pine to­bacco,” it added.

Based on data from the Na­tional To­bacco Ad­min­is­tra­tion (NTA), to­bacco pro­duc­tion went down from 68 mil­lion ki­los in 2013 to 48 mil­lion in 2017.

PTGA ar­gued that the lo­cal to­bacco in­dus­try has paid some PHP126 bil­lion to the Bureau of In­ter­nal Rev­enue (BIR) in 2017 alone. But de­spite their enor­mous con­tri­bu­tion to gov­ern­ment’s cof­fers, to­bacco farm­ers are barely sur­viv­ing.

The group said that the in­creases in prices of to­bacco prod­ucts have also con­trib­uted to the in­fla­tion surge.” These cig­a­rette prices have con­trib­uted to the spike in in­fla­tion to all-time highs. Our fam­i­lies are barely cop­ing,” the PTGA said.

Pres­i­dent Ro­drigo R. Duterte has ap­proved the pro­posal of two agen­cies to raise ex­cise tax on al­co­hol and to­bacco prod­ucts to fund the gov­ern­ment’s Univer­sal Health Care (UHC) pro­gram.

Pres­i­den­tial Spokesper­son Sal­vador Panelo said the Pres­i­dent an­nounced his de­ci­sion dur­ing Mon­day’s 33rd Cab­i­net Meet­ing in Mala­cañang.

“The Chief Ex­ec­u­tive like­wise ap­proved the pro­posal of the De­part­ment of Health and the De­part­ment of Fi­nance to in­crease the ex­cise tax on al­co­hol and to­bacco prod­ucts,” Panelo said in a state­ment.

“This is a key pub­lic health mea­sure to re­duce deaths and dis­abil­i­ties due to to­bacco and al­co­hol con­sump­tion and, at the same time, a rev­enue mea­sure to fund the univer­sal health care pro­gram,” he added.

In De­cem­ber last year, Fi­nance Sec­re­tary Car­los Dominguez III pushed for the in­crease in the cur­rent to­bacco ex­cise tax rates to lev­els that would ef­fec­tively curb smok­ing and also help sup­ple­ment funds for the UHC pro­gram.

In the same month, the House of Rep­re­sen­ta­tives ap­proved House Bills (HB) 8677 and 8618, which in­crease the tax on cig­a­rettes and al­co­holic drinks, re­spec­tively.

HB 8677 seeks to in­crease ex­cise tax rates for to­bacco by PHP2.50 ev­ery year, start­ing July 2019 un­til 2022.

Un­der the mea­sure, cig­a­rette ex­cise tax rate will be raised to PHP37.50 per pack by July 2019, PHP40 for 2020, PHP42.50 for 2021, and PHP45 for 2022. The rate would be raised 4 per­cent ev­ery July an­nu­ally, start­ing 2023.

HB 8618 aims to raise ex­cise taxes on dis­tilled spir­its, wines, and fer­mented liquors.

Un­der the mea­sure, the cur­rent 20 per­cent ad val­orem tax im­posed on dis­tilled spir­its shall be in­creased to 22 per­cent, while spe­cific tax rates per proof liter of PHP30, PHP35, PHP40, PHP45 shall be im­posed from 2019 to 2022. The spe­cific tax rate shall be in­creased by 7 per­cent an­nu­ally, start­ing 2023. (PNA)

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