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Gordon: Excise tax hike may displace tobacco farmers

/ 01:10 AM May 29, 2019

MANILA, Philippines — Sen. Richard Gordon on Tuesday raised his concern over the possible effects of increasing the excise tax on cigarettes to tobacco farmers.

Citing data from the National Tobacco Administration, Gordon said there was a decrease in the number of tobacco farmers in the Philippines, particularly in the Ilocos Region, from 2015 to 2017.

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This, Gordon said, should be taken into consideration as further increasing taxes on tobacco products would mean less demand and possible displacement for the farmers.

“There is irrefutable evidence that a significant portion of tobacco farmers would qualify as being the lowest income-quintile in the country,” Gordon said during the Senate plenary session.

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“So that means they would be deprived of their income, and I just want to know what is the experience in so far as the last round increases of tobacco taxes are concerned? Do we have any empirical data that tobacco farmers were able to make adjustments or is this just again speculation?” he added.

Under the bill, the tax on cigarettes would be raised by P10 per pack in 2020 — from the current P35 per pack to P45. This would rise again to P50 in 2021, P55 in 2022, and P60 in 2023.

READ: Senate panel draft seeks P45 to P60 tax on tobacco

Gordon also underscored the need for concrete government programs that would help tobacco farmers.

“A lot of farmers will be affected. We keep talking about the health conditions of people but when people are hungry, their health condition suffers also,” Gordon said.

“Is there a study by government to take care of them or is government taking the cavalier role and let them take care of themselves?” he added.

The primary sponsor of the measure, Sen. Sonny Angara, said that the government was “very much concerned with the well-being of farmers,” adding that several laws had been passed for the public’s welfare.

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“The Senate can also take credit for improving lives because we passed the free college tuition so that the children of these farmers don’t have to worry about where to go to school,” Angara said. “We passed the Universal Health Care [bill]. If we find the money for that, then that takes the burden out of these families.”

President Rodrigo Duterte on Tuesday certified the bill as urgent.

In his letter to Senate President Vicente Sotto III, the President said there was an “urgent need to further protect the right of the health of the people and to maintain a broader fiscal space to support the effective implementation of the Universal Health Care Act.”

When the President certifies a measure as urgent, Congress may immediately pass the bill on third and final reading after its approval on second reading.

READ: Duterte certifies as urgent bill on higher tobacco excise tax

Finance Secretary Carlos Dominguez III, who has been vocal in his call for the passage of the bill, earlier underscored the need for additional funding for the Universal Health Care Law.

READ: DOF chief OK with staggered tobacco tax hike for healthcare program

(Editor: Alexander T. Magno)

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TAGS: excise taxes, Richard Gordon, tobacco farmers, Tobacco tax
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