NTA chief joins opposition to cigaret tax plan By Teddy P. Molina The Philippine STAR  Admnistrator Carlitos Encarnacion of the National Tobacco Administration (NTA) expressed support yesterday to the northern congressional bloc's opposition to the planned uniform tax rate system covering all classes of cigarets. The northern bloc headed by Deputy Speaker Eric Singson has earlier vowed to shoot down the tax proposal initiated by the Department of Finance when submitted for House deliberation saying it will "kill" the tobacco industry. Encarnacion said that about 60 percent of the yield of a tobacco plant consists of low grade leaves which are utilized by makers of low class or ordinary cigarets for their products. Under the DOF tax plan, imported, premium, and ordinary cigarets are to be taxed at the same rate of P14 a pack. Singson asserted that the proposed tax scheme would drive low class cigarets out of business as they will not be able to stand the sales competition.   He said that such cigarets which are being sold at P8 to P10 a pack will be compelled to increase their prices almost at par with premium cigarets and would not be affordable to their patrons.  Encarnacion whose agency supervises tobacco farm production explained that each tobacco plant when harvested is made up of  top grade leaves (AA, A, and B) and the dominant low grade leaves (C, D, E, and R). The top grades are procured by traders supplying the requirements of makers of premium cigarets.     He said that no tobacco farmer will venture into raising the crop if no one buys his low grade leaf production because a big chunk of his income comes from the sale of C, D, E, and R leaves. Under such a situation, the NTA chief warned, local tobacco farming will be forced to stop. Presently, low class cigarets are charged P2.50 a pack in excise tax while local premium cigarets are taxed P10 and imported cigarets P25 a pack. Ilocos Sur Gov. Deogracias Victor Savellano, earlier, similarly rejected the single tax rate scheme saying he will ask the support of his fellow governors in opposing the move. He supported Singson's move in Congress saying that when manufacturers of low class cigarets close shop there will be no demand for the farmers' low grade leaf harvest.

Northern bloc in congress oppose one tier tax for all cigaret brands Ilocos leaders, tobacco farmers oppose uniform tax on cigarets Tobacco industry is here to stay - Chavit

 

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