Much–awaited tobacco funds for Ilocos to be released soon

January 25, 2015 12:34 pm 

LAOAG CITY, Jan. 24 — This is good news to the tobacco-producing provinces in Northern Luzon.

President Benigno Aquino III has given the green light for the release by the early part of this year of the much-awaited tobacco excise tax share of all the tobacco-producing provinces in accordance with existing laws.

Congressman Eric D. Singson (2nd district of Ilocos Sur) said President Aquino assured this to him in his recent visit to Malacañang.

“The President called Secretary Florencio Abad of the Department of Budget and Management (DBM) directing him to immediately work on the release of tobacco excise tax shares of the Ilocos provinces,” Singson said

However, he disclosed that the “past due” excise tax shares for the year 2012 under Republic Act 8240 or the Burley and Native tobacco excise tax law, and RA 7171 or the Virginia tobacco fund, will be released first.

The tobacco fund that is expected to be released first is the ‘past due shares’ of the tobacco-producing provinces in 2012 not yet received by almost all the recipient-local government units (LGUs), provinces and congressional districts.

“The immediate release of the long-overdue tobacco funds both from RA 7171 and RA 8240 by the national government is necessary considering the fact that farmers from the tobacco-producing provinces were severely affected by typhoon Mario last year,” Singson said.

Singson clarified that the delay in the release of the tobacco funds was caused by the long discussions on the provisions of the RA 8240 following the enactment of the RA 10351 or the new sin tax law restructuring the existing taxes imposed on alcohol and tobacco goods.

President Aquino signed into law RA 10351 on Dec. 20, 2012 and was effective on Jan. 1, 2013.

Upon the enactment of RA 10351, the tobacco excise tax collected by the national government already reached Php 67 billion in 2013, or up by Php 35 billion from the Php 32 billion tobacco excise tax in 2012.

Under the tobacco law, the national government must provide 15 percent share to the Virginia tobacco- producing provinces (Ilocos Sur, Ilocos Norte, Abra and La Union) from the total collected excise taxes annually.

Of the 15 percent tobacco excise tax share from the national government for the tobacco –producing provinces, 30 percent goes to the beneficiary province; 40 percent to the LGUs-beneficiaries; and 30 percent to form part of the congressional share of the beneficiary- provinces.

However, the implementing rules and regulations (IRR) of RA 10351 sought more transparency in the implementation of the tobacco funds.

The LGU’s programs and projects to be funded pursuant to the new law shall be incorporated in the General Appropriations Act.

Section 3 Rule VIII, of said IRR, mandates the Department of Budget and Management (DBM), the Department of Agriculture (DA) and the National Tobacco Administration (NTA) to institutionalize the mechanism to monitor the utilization of the fund allocation to LGUs in terms of benefits derived in accomplishing the purposes of RA 7171 and RA 8240.

The sin tax law provides that part of tax collections as provided for in RA 7171 and RA 8240, is allocated to ease any impact on tobacco farmers and workers who may be displaced due to expected reduction in demand of tobacco products.

Consistent with RA 8240, the new law provides that fund from the shares of burley and native tobacco-growing towns and provinces will be exclusively used for programs to promote economically viable alternatives for tobacco farmers and workers.

The allocation will also be used for infrastructure projects like farm-to-market roads, schools, hospitals, and rural health facilities and agro-industrial projects that will enable the farmers to be involved in the management and subsequent ownership of projects such as post-harvest and secondary processing like cigarette manufacturing and by-product utilization. (PNA)



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