Group says higher tobacco tax to benefit politicans, not farmers

CANDON CITY, Philippines – Tobacco farmers belonging to the Solidarity of Peasants Against Exploitation (STOP Exploitation) decry the cigarette tax bill being supported by the House of Representatives’ Northern Luzon Alliance, saying it will only fatten politicians' pockets.

 

“The bill intends to ensure corporate profit and bigger excise tax share for politicians to plunder,” said Zaldy Alfiler, STOP Exploitation secretary general. STOP Exploitation is a regional peasant federation in Ilocos Norte, Ilocos Sur, La Union and Abra with a claimed membership of 10,000.

 

Lawmakers from tobacco-producing provinces, he said, should instead focus on legislation that ensures direct benefits for farmers from the excise tax share that local governments receive.

 

Majority Floor Leader and Ilocos Norte First District Rep. Rodolfo Fariñas and Ilocos Sur Second District Rep. Eric Singson are convenors of the Northern Luzon Alliance.

 

According to Alfiler, health and tobacco regulations groups are condemning how the House Committee on Ways and Means headed by Rep. Dakila Cua of Quirino Province railroaded House Bill 4144.

 

They said the bill was filed only on October 19 and was approved by the committee on December 5 without amendments, and fielded in the plenary the next day.

 

HB 4144 was authored by ABS Partylist Rep. Eugene De Vera, who hails from Sto. Domingo, Ilocos Sur.

 

It aims to keep the two-tiered excise tax on cigarettes. Rates are set at P32.00 per pack for brands priced at P11.50 a pack and below and P32.00 for higher-priced brands.

 

It also proposes a 5-percent annual increase in the excise tax starting 2018.

 

Alfiler said “railroading the bill shows how keen are the members of the Northern Alliance of creating measures to increase their share mandated by Republic Acts 7171 and 8240, but inept in ensuring that peasants receive substantial benefits.” 

 

Republic Acts 7171 and 8240 mandate 15 percent of the excise tax collected from tobacco products be given to provinces producing the crop.

 

Antonino Pugyao, who chairs STOP-Exploitation noted “the excise tax fund has always been a source of corruption and bastion for patronage politics.”

 

Instead of increasing the base for the excise tax share, legislators should craft laws that guarantee direct benefits for farmers from the fund such as utilizing it for genuine agrarian reform, he said.

 

The group also scoffed at Rep. De Vera’s claim that the implementation of the new Sin Tax Law (RA 10351) caused economic dislocation of farmers.

 

Alfiler believes that blaming RA 10351 is an effort to hide the truth that “tobacco farmers continue to experience huge debt and bankruptcy because of high land rent, extreme usury, lack of government support and plunder of the excise tax fund, and the low buying price imposed by tobacco companies.”

 

“ABS Partylist failed to capture the real sentiments of the farmers, it is parroting overused lines of tobacco companies,” he said.

 

STOP-Exploitation leaders maintain that “whatever system is use, the government and peasants will always be at the losing end. For them, cigarette and tobacco companies will always acquire large profits.”

 

Alfiler explained that since specific tax is imposed on tobacco and tobacco products, the method fails to account production and product upgrading that usually causes price increase.

 

This, according to him, will provide greater profit for the company while decreasing the value of relative tax specially with high-priced brands.

 

Pugyao, on the other hand, cited a World Health Organization study that says two-tiered system creates a hole in taxation system that allows cigarette companies to avoid paying the appropriate tax by repositioning their brands from higher to lower tiers.

 

STOP Exploitation is proposing that local governments pass ordinances that automatically appropriate a portion of their share for disaster response, early recovery, and rehabilitation for farmers and farming communities in view of the region’s experience with Super Typhoon Lawin and other typhoons that ravaged the tobacco producing provinces of Ilocos Norte, Ilocos Sur, La Union and Abra.

 

The group claimed that LGUs failed to utilize the fund to augment their limited calamity fund, thereby, falling short of providing relief and livelihood assistance to farmers.