Big tobacco farmers’ group backs cigarette tax bill

The National Federation of Tobacco Farmers Association and Cooperatives (NAFTAC) is throwing its full support to House Bill 4144, calling it the “true pro-farmers measure and pro-poor.”

NAFTAC president Mario E. Cabasal also called on his group’s members to focus on the real issues surrounding the bill, saying the biggest concern is the fate of the country’s tobacco farmers and their continued livelihood.

“We support HB 4144 because it is the true pro-farmers measure. We had already voiced our position when the bill was being discussed in Congress and nothing has changed,” Cabasal said in a statement issued on Saturday.

“I call on our members not to be influenced by the reports that are coming out regarding HB 4144. What will be good for the farmers is the measure that will ensure our continued survival. In our view, that is HB 4144,” he added.

Cabasal said a unitary tax rate, which is mandated under Republic Act 10351, or the Sin Tax Reform Law, will be detrimental to local tobacco farmers.

“A unitary tax rate will benefit only the premium cigarette brands, which are the foreign brands. They will just import higher quality tobacco leaves. This means we the local farmers who produce low grade tobacco will suffer the most,” he said.

“Locally produced tobacco leaves are mostly low grade. Our fear is that if a unitary tax rate is imposed, local production will be affected. There will be less purchases of our produce and our livelihood will be greatly affected. And this is what we told Congress (during the deliberations on HB 4144),” Cabasal added.

HB 4144, authored by partylist Rep. Michael de Vera, seeks to amend Section 145 (c) of the National Internal Revenue Code of 1997 which imposes a unitary tax rate of P30 per pack for both low-priced and premium brands starting in January 2017.

Low-priced brands are those that retail for P11.50 per pack or lower, while premium brands are those that retail at more than P11.50 per pack.

The current tax rate mandated under RA 10351 is P25 per pack for low-priced brands and P29 per pack for premium brands.

HB 4144 seeks to reinstate the two-tier system in place of the unitary tax but with a tax rate of P32 per pack for low-priced brands and P36 per pack for premium brands, with an increase of five percent every year.

Cabasal said it was unfair for critics of the proposed bill to say that the measure would be detrimental to local tobacco farmers.

“Claims that the measure would hurt local tobacco farmers are not true. HB 4144 will keep providing tobacco farmers with livelihood opportunities. It is the impending unitary tax rate that will be detrimental to tobacco farmers. In the end, we will be the ones on the losing end,” he said.

He added that arguments against HB 4144 were just “muddling the real issue, which is the survival of the country’s tobacco industry.” ASU