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LGU allocation from tobacco tax is P24.8B


The Department of Budget and Management (DBM) said local government units (LGUs) have been allocated P24.8 billion as their share from excise taxes collected from tobacco in 2019.

The department in its budget memorandum orders released Tuesday said that LGUs will get over P19.87 billion from excise taxes on domestically-manufactured Virginia-type cigarettes, as well as P4.94 billion from taxes on Burley and native tobacco.

Excise tax allocations from Virginia-type cigarettes must be used to support tobacco farmers, including cooperative projects to improve farmer productivity, livelihood projects like alternative farming systems, and infrastructure projects like farm-to-market roads.

The Burley and native tobacco allocations go towards funding inputs for other agricultural products like spices and rice, financial support for displaced tobacco farmers, cooperative programs for farmers planting other crops, and infrastructure projects, among others.

LGU receipts from 2018 excise tax collections hit P21.28 billion, including P17.33 billion from taxed Virginia-type cigarettes.

Shares are distributed among provinces according to their volume of tobacco production.

Republic Act No. 7171 directs the DBM to allot a percentage of taxes on domestically- manufactured Virginia-type cigarettes to local governments.

Republic Act No. 10351 or the Sin Tax Law of 2012 assigns a percentage of the tobacco excise tax to fund programs supporting tobacco farmers. — Jenina P. Ibanez

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