Tobacco grower warns against further tax hikes

Warren de Guzman, ABS-CBN News

Posted at Feb 01 2018 12:57 PM

MANILA - A tobacco growing and processing firm on Thursday urged the government to assess the effects of its first tax reform package before further raising duties.

Tobacco demand has dropped since taxes were raised in 2012 and will likely go down further after the duties were increased again this year, said Universal Leaf Philippines Inc president Winston Uy.

Universal Leaf Philippines is affiliated with the firm that supplies tobacco to Philip Morris USA, according to its website.

"Imposing an additional tax hike will result to even less tax collection. Consequently, this will decrease generated revenues, part of which goes to health coverage for the poor," Uy said.

"Tobacco gives the biggest contribution to the government through livelihood and employment. Why focus tobacco alone? Why not focus other products that contribute less than tobacco?," he said.

Under the second package of reforms, the government will not submit its own proposal on tobacco excise taxes but will instead "support" a bill filed by Sen. Manny Pacquiao, the Department of Finance said in a statement.

Pacquiao is seeking a unitary cigarette excise tax of P60 this year and a mandatory 9 percent annual increase, according to a copy of the bill.

The first tranche of tax reform that took effect Jan. 1 increased the duty on tobacco products to P32.50 per pack from Jan. 1 to June 30, 2018 and further to P35 from July 1 next year to Dec. 31, 2019. The current rate stands at P30.