Raising tobacco tax will not have bad impact on growers – think-tank

The world of smokers continues to shrink but tobacco farmers plod on, like this man in Villasis, Pangasinan, who waters his tobacco plants to protect them from heat. WILLIE LOMIBAO

A think-tank revealed on Tuesday said that increasing the excise tax on tobacco would not have a negative impact on the livelihood of tobacco farmers in the Philippines.

Jo-ann Diosana from the Action for Economic Reforms (AER) argued this during a House ways and means panel hearing into bills proposing an increase on the tobacco excise tax.

Citing Philippine Statistics Authority data, Diosana said there was an increase in local tobacco production from an average of 40,000 metric tons in 2008 to 2012 (before enactment of the Sin-Tax Law) to an average of 56,000 metric tons in 2013 to 2017.

“This means there is no relationship between an increase in the excise tax on cigarettes and the local production…” she said, stressing that an average of 70 percent of local tobacco produce is being exported.

“This means there’s no trade-off between the livelihood of farmers and our (pursuit) of health goals and better fiscal space for the country,” Diosana added.

Diosana also said that the budget allocation for tobacco-growing regions had been increasing in the past years. She said additional excise taxes on tobacco products can also be used to support farmers.

On Monday, representatives of tobacco companies warned lawmakers that raising the excise tax on cigarettes would have significant negative effects on tobacco workers and even on government revenues.

READ: Firms sound alarm on raising cigarette taxes again | House suspends hearing on additional tobacco excise taxes

Quezon 4th District Rep. Angelina Tan’s House Bill No. 6648 increases the tobacco unitary excise tax to P60 per pack in the first year of implementation, followed by a 9 percent annual increase thereafter.

Meanwhile, Albay 2nd District Rep. Joey Salceda’s House Bill No. 4575 increases excise tax to P40 to P60 per pack in the first five years of implementation, with a 5 percent annual increase thereafter.

Both bills are still under the deliberations of the committee chaired by Nueva Ecija 1st District Rep. Estrellita Suansing. /cbb /muf