It’s Chavit Singson against the rest of solid North on sin tax issue

Lawmakers and local government officials from the tobacco-growing Ilocos region  used to be a solid bloc on tax issues  until  Ilocos Sur Governor Luis “Chavit” Singson revealed that he was supporting the government’s move to increase taxes on cigarettes after decades of blocking higher taxes.

Singson said that he would hold an emergency meeting with members of the Northern Luzon Alliance next week to his explain his stand supporting the Department of Finance’s proposal to shift from a multi-tiered to a unitary tax system for cigarettes currently being debated in Congress.

Real dangers

Singson said he planned to tell his colleagues in the NLA about the “real dangers” of the monopoly situation in the cigarette business when Philip Morris merged and took over Fortune Tobacco Corp.

Singson claimed that since the two merged two years ago, prices of tobacco have gone down  from P83 per kilo in 2009 to P78 per kilo in 2010 and P77 in 2011. Singson said that he expected prices to continue going down since there was only one buyer left for their tobacco and farmers have practically no choice but to sell at the price dictated by the monopoly buyer.

Singson’s stand  was backed up by League of Provinces of the Philippines president Oriental Mindoro Governor Alfonso Umali who recently threw his support to  House Bill No. 5727 authored by Cavite Representative Joseph E. A. Abaya which has sent members of the NLA in disarray.

Unfortunate

“It is unfortunate that Governors Umali and Singson made that statement considering that they come from tobacco growing provinces and have tobacco farmers as their constituents, not to mention that their provinces are recipients of funding from their share of tobacco tax collections,” said Ilocos Norte Governor Imee R. Marcos in a statement. “I am appealing to my fellow governors to consider the plight of at least 2.9 million tobacco farmers, workers and their dependents before supporting the Abaya bill. What would happen to local tobacco farmers if we deprive them of their main livelihood?”

Cagayan Governor Alvaro T. Antonio warned that the exorbitant taxes arising from HB 5727 would unduly favor high-priced cigarette brands over low-cigarette brands that buy local tobacco leaves.

La Union Governor Manuel C. Ortega claimed that Umali did not consult LPP members in making his statement.