Farmers unfazed by sin tax bill; exports to boost incomes – DA

MANILA, Philippines – The Department of Agriculture (DA) said the big demand for tobacco exports abroad will encourage farmers to continue cultivating the crop despite the sin tax measure. 

The sin tax measure, ratified by the Senate and House of Representatives in a bicameral committee last week, is bound to make cigarettes more expensive in the Philippines. This is being seen as a major deterrent to smoking, especially among teen smokers. 

“Farmers’ attitude towards tobacco cultivation will not change because there is still a big demand for export. Even if fewer Filipinos will buy cigarettes, I don’t think their attitudes will change. I’m talking to them and so long as their income is there, they will continue planting,” Agriculture Secretary Proceso Alcala told reporters on Friday, December 14.

Based on the measure ratified by the bicameral committee, government revenues are expected to receive an additional boost of P33.96 billion starting next year. 

Of the total, some P23.4 billion will be obtained from raised tobacco taxes while P10.56 billion will be obtained from taxes on fermented liquor and distilled spirits. This shows a burden sharing of 69% to 31% between tobacco and alcohol products, respectively.

Other agreements approved by the bicameral committee included a 4% tax rate increase every two years and the removal of the sunset provision from the bill. 

The government is allotting 15% of the sin tax revenues for affected farmers, while the remaining 85% will be for the government’s universal health care program.

The National Tobacco Administration reported that the Philippine tobacco industry produced P5.3 billion-worth of tobacco in 2011. Some $91.1 million or roughly P3.9 billion was exported overseas. – Rappler.com