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LGU cut from 2020 tobacco excise P19B 


THE Department of Budget and Management (DBM) said local government units (LGUs) have been allocated P19.01 billion as their share of excise taxes collected from tobacco in 2020.

In a memorandum circular released on Monday, the DBM said LGUs will get P15.01 billion from excise taxes on locally manufactured Virginia-type cigarettes and P4 billion from the burley and native tobacco variety.

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

The burley and native tobacco allocations will go towards programs to provide inputs, training, and other support for tobacco farmers. It will also financially support displaced tobacco farmers, and allow for cooperative programs for farmers planting other crops, and infrastructure projects, among others.

LGU receipts from 2019 indicate an excise tax share of P24.8 billion, including P19.87 billion from Virginia-type cigarettes and P4.94 billion from taxes on burley and native tobacco.

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 from 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. — Keisha B. Ta-asan

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