Claveria town gets P355-M tobacco excise tax windfall


CAGAYAN DE ORO CITY, Misamis Oriental: For growing Brightleaf tobacco, the town of Claveria gets P355,666,474, which is 40 percent of the P700-million share from tobacco excise taxes for 2015 while the province of Misamis Oriental takes P210,166,552 or 30 percent as its share, the Department of Budget and Management (DBM) disclosed recently.

The remaining 30 percent are distributed evenly among Misamis Oriental’s 23 towns and three cities at P5,388,886 each.

The Brightleaf or Virginia-type of tobacco is grown in 1,231 hectares by 1,375 contract growers in Claveria, 71 kilometers southeast of this city, according to Ma. Mercedes Ayco, tobacco production and regulation officer for Mindanao of the National Tobacco Administration (NTA).

The Phillip Morris Fortune Tobacco Corporation has invested $50 million for establishing production systems and on-site processing of the crop in this town since 2012.

The NTA noted that the annual production in 2015 hit 1,314, 969 kilos, or more than 1,300 metric tons, thus qualifying the province as recipient of the special financial support.

Under Republic Act (RA) 7171, which promotes the development of farmers in Virginia tobacco-producing provinces, Misamis Oriental is entitled to ‘’the special support fund for developmental projects to be implemented by the local governments of the provinces concerned.’’

According to DBM guidelines based on RA 7171, the special support fund to the Virginia tobacco-producing provinces shall be utilized to advance the self-reliance of the tobacco farmers through:

*Cooperative projects that will enhance better quality of products, increase productivity, guarantee the market and as a whole increase farmers’ income;

• Livelihood projects particularly the development of alternative farming system to enhance farmers’ income;

• Agro-industrial projects that will enable tobacco farmers in the Virginia tobacco-producing provinces to be involved in the management and subsequent ownership of these project such as post-harvest and secondary processing like cigarette manufacturing and by-product utilization; and

• Infrastructure projects such as farm-to-market roads.

The tobacco excise funds come from proceeds of fifteen percent of the excise taxes on locally manufactured Virginia-type of cigarettes.

The funds allotted shall be divided among the beneficiary provinces pro rata according to the volume of Virginia tobacco production.

Towns where tobacco is grown get a 40-percent share, the province also gets 40 percent and the rest of the towns and cities in the congressional districts of the province claim the rest of the 30 percent share, accordidng to the DBM guidelines.

Misamis Oriental qualified as beneficiary as its annual production of Virginia leaf tobacco reached more than one million kilos in 2015.

Under RA 10351 or the sin tax reform law passed in 2013, taxes on cigarettes and tobacco products increased by about 117 percent.

The 2013 tax policy is a legislative measure to fulfill the country’s commitment to reduce the demand for tobacco under the World Health Organization Framework Convention of Tobacco Control, of which the Philippines is a signatory.



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