Tobacco-producing areas to receive P46B from DBM

Local government units (LGUs) in areas that grow tobacco are receiving a total of P46.1 billion from the Department of Budget and Management (DBM) as their share in the excise taxes collected from the sale of cigarettes and tobacco in 2018 and 2019.

Local Budget Memorandum Nos. 83 and 84 issued by DBM officer in charge Tina Rose Marie Canda on Nov. 22 said the LGU shares included P21.3 billion from the 2018 collections and P24.9 billion from the 2019 collections.

Excise taxes are slapped on locally manufactured Virginia cigarettes as well as burley and native tobacco.

The 2018 share of the LGUs will come from the 2020 budget while the 2019 share will come from this year’s budget.

For this year, four provinces—Abra, Ilocos Norte, Ilocos Sur and La Union—which produce Virginia tobacco will divide among themselves P19.9 billion.

Ilocos Sur, which accounted for the bulk or 61 percent of total production in 2019, will get 61 percent of the amount or P12.1 billion to be divided among its 34 cities and municipalities.

Meanwhile, 18 provinces will divide among themselves P4.9 billion for their burley and native tobacco production in 2019.

Under Republic Act No. 7171, LGUs in areas that produce Virginia tobacco leaves corner a 15-percent share of national cigarette and tobacco excise tax collections, of which provincial governments will receive 30 percent; congressional districts, 30 percent, while cities and municipalities will get the remaining 40 percent.

However, since the Supreme Court had declared the legislators’ so-called pork barrel unconstitutional—hence, prohibited—releases will be distributed only to provincial, city and municipal governments.

—Ben O. de Vera