Press Release
November 9, 2012

P6 billion from sin tax bill will go to tobacco farmers, says Drilon

Senator Franklin M. Drilon today allayed fears of tobacco farmers and workers in Northern Luzon about the supposed drawback of the sin tax reform bill on their livelihood.

"Our farmers can be assured of a variety of assistance from the government once this sin tax bill is passed. We will double the safety net being provided under the law to help them augment their income and to support alternative livelihoods for the farmers," stressed Drilon, the acting chair of the Senate Ways and Means committee.

"The government will provide input subsidies to produce better quality of tobacco leaf and also farm trainings for those who want to shift to other crops that yield higher income," said Drilon. He added that because of the poor quality of tobacco leaves being produced by the farmers, only 15 percent of the production needs of cigarette-producing companies used locally produced tobacco; the other 85 percent is imported for a much higher price.

Under the Republic Act 7171, tobacco farmers our entitled to a 15 percent of the incremental tobacco revenue collected from the excise tax on tobacco products, noted Drilon.

He said at present only P4 billion go to the farmers from the excise tax on tobacco, but "once this sin tax reform bill that is now the subject of several interpellations in the Senate is passed, the amount that will go to our farmers will jump to roughly P10 billion which will be of a great value to them."

The safety net, added Drilon, can be used to assist the farmers who want to shift from planting tobacco to farming other more profitable crops like corn, garlic, tomato and pepper.

"Farmers can plant other crops than tobacco and they are assured that the government will give its full support to them," said Drilon, adding that tobacco produce, based on a survey by the Bureau of Agricultural Study, decreased from 81,723 metric tons in 1990 to 40,529.77 metric tons in 2010. Aside from this, land area devoted to tobacco farming diminished to 29,707 hectares in 2010 from 63,200 in 1990.

"The bill also encourages and will capacitate the farmers to plant other lucrative crops," explained Drilon.

Moreover, Drilon called on his colleagues to immediately pass the bill rationalizing excise taxes on tobacco and alcohol products.

He said that rationalizing sin taxes would not only raise funds for government's health care program but would also help improve the health of ordinary Filipinos.

"That smoking has no known benefit is beyond question. It is costly, it is harmful to one's health and it kills. That is a fact that has been proven by countless medical studies. And I know this from experience because my first wife died due to lung cancer."

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