Tobacco provinces get P21 billion tax share

MANILA, Philippines — The Department of Budget and Management (DBM) has approved the release of the excise tax share to the tobacco-producing provinces, amounting to P21 billion.

In line with revenue-sharing laws, the DBM has authorized the release of funds to the Bureau of the Treasury, based on the latest Special Allotment Release Order (SARO) list issued on Monday.

The funds represent the share of local government units from the 2023 collections of excise taxes on Virginia-type, Burley and native tobacco products.

Although the provinces are not indicated in the SARO, tobacco is commercially grown in the provinces of Cagayan, Isabela, Nueva Vizcaya, Quirino, Ifugao, Mountain Province, Iloilo and Leyte, according to the National Tobacco Administration.

It is also grown in the provinces of Negros Oriental, Capiz, Cebu, Misamis Oriental, Zamboanga del Sur, North Cotabato, South Cotabato, Maguindanao, Sarangani, Bukidnon and Davao del Sur.

Under Republic Act 7171, the financial support from the national government for beneficiary provinces shall be sourced from 15 percent of excise taxes on locally manufactured Virginia-type cigarettes and distributed pro rata based on Virginia tobacco production volume.

The allocations, however, are capped at P17 billion.

To qualify as a beneficiary, a province must have an average annual production of at least one million kilos of Virginia leaf tobacco, with the DBM determining each year the eligible provinces and their corresponding shares based on tobacco acceptance records from the National Tobacco Administration.