Sin Taxes will help farmers, says government, advocates

The administration’s sin tax reforms will not only score points for public health and revenues, but may even help ease tobacco farmers out of poverty, reformist groups argued this week in Congress.

During heated committee hearings on February 21 and 22, supporters of the planned levy disputed rehashed and recycled claims among pro-tobacco forces that farmers— more so than the tobacco monopoly— would be the chief victims of the said reforms.

With this measure, we’ll not only save the young and the poor, but also the tobacco industry… It’s inclusive of everyone,” alleged Commissioner Kim Henares of the BIR, speaking on behalf of the government panel, as well as of advocates.

Lawmakers from tobacco-growing regions had scowled upon the bill in preceding discussions. Restructuring the existing excise tax scheme would inhibit the capacity of the tobacco industry to purchase the crops grown by local farmers, they had claimed.

However, the DOF has estimated that around P225 billion of the incremental revenues from the sin tax reforms will, in fact, be devoted to furnishing alternative livelihoods for any affected farmers over the first 5 years of the measure’s implementation.

We want to have a safety net for those who will be displaced, if there will be any” maintained Commissioner Henares, alluding to these livelihood programs. Conditional cash grants for impacted sectors were among the other provisions touched upon in the hearing.

In a number of reputable studies, the lands of tobacco farmers have been found to have been fit for the cultivation of other crops such as tomato, bitter gourd, and peppers.

Many of these same crops promise better incomes for farmers than what is presently received under tobacco cultivation. Already, over the past two decades, more than half of all tobacco-growing lands have been converted to planting them, shared the advocates.

The reform of the tobacco excise tax system will largely benefit the farmers,” asserted Jo-ann Latuja of the policy group Action for Economic Reforms, “The data shows that they’ll be a win-win-win solution: pro-youth, pro-poor and pro-farmer.”

Even for tobacco farmers that will not shift out of tobacco, the excise levy will convey other benefits, Latuja added. By levelling the tobacco monopoly and by increasing the numbers of raw tobacco buyers, the proposed measure will also raise farmer’s selling prices for their produce.

We always make the mistake of thinking that this bill will essentially kill the industry,” said Secretary Enrique Ona of the DOH, attempting to reassure anti-reformist legislators, “It should be very, very clear that this isn’t an issue that will kill the industry, but actually it’s an issue that will help poverty reduction.”

Congressional hearings on the sin tax bill are presently scheduled resume on February 28.

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