DBM to release LGU shares from tobacco excise taxes

The Department of Budget and Management (DBM) announced today that it is set to release the shares of local government units (LGUs) from the 2013 collection of excise taxes on locally manufactured Virginia-type cigarettes, as well as on burley and native tobacco.

File photo
File photo

Based on guidelines issued this week by DBM, allotments for a total of P10.69 billion will be released to tobacco-producing LGUs nationwide. Of the amount, P10.19 billion pertains to the excise tax on cigarettes, while the remaining P503.9 million pertains to taxes on tobacco.

Candon City, Ilocos Sur is the highest recipient of shares with P356.9 million. It is a fourth-class city with an average annual income between P160 million and P240 million. Three out of the top ten LGUs—San Juan, Sinait, and Magsingal—are third-class municipalities with an average annual income between P35 million and P45 million.

“These funds will certainly aid LGUs, especially those with lower annual incomes, to implement projects that will enable tobacco farmers to increase their productivity and income,” Budget Secretary Florencio B. Abad said.

“Also, through their fair share of tobacco excise taxes, LGUs will be able to boost their capacity to deliver basic services to communities, which is important for the national government’s goals on redistribution and meaningful devolution,” added Abad.

Below is a breakdown of the 10 LGUs with the highest shares from the 2013 collection of excise tax on locally-manufactured Virginia-type cigarettes under RA 7171:

LGU Amount
Candon City, Ilocos Sur P356,857,162
Cabugao, Ilocos Sur 331,288,034
Balaoan, La Union 320,426,556
Narvacan, Ilocos Sur 276,896,635
Sta. Cruz, Ilocos Sur 264,492,112
San Juan, Ilocos Sur 239,652,663
Santiago, Ilocos Sur 232,386,288
Sinait, Ilocos Sur 196,236,833
Magsingal, Ilocos Sur 183,072,230
Batac City, Ilocos Norte 178,024,130

Under Republic Act No. 7171, LGUs producing locally manufactured Virginia-type cigarettes are entitled to 15 percent of national tax collections. 30 percent will be divided among the beneficiary provinces, 40 percent among component cities and municipalities, and 30 percent to the component cities and municipalities to be computed based on the volume of tobacco production.

Meanwhile, under Republic Act No. 8240, LGUs producing burley and native tobacco will also receive a share of 15 percent from excise tax collections in 2013. Of this share, 10 percent will go to beneficiary provinces and 90 percent to the component cities and municipalities based on the volume of tobacco production.

Below is a breakdown of the 10 LGUs with the highest shares from the 2013 collection of burley and native tobacco excise tax under RA 8240:

LGU Amount
Roxas, Isabela 30,805,639
San Jose, Occidental Mindoro 30,765,641
Quirino, Isabela 29,652,082
Aurora, Isabela 24,981,123
Narvacan, Ilocos Sur 18,584,576
Ilagan City, Isabela 16,906,225
Tumauini, Isabela 16,452,367
San Fabian, Pangasinan 15,139,615
Mallig, Isabela 14,958,416
Amulong, Cagayan 14,815,130

Four out of the top ten LGUs—Roxas, San Jose, Tumauini, San Fabian—are first-class municipalities with an average minimum income of P55 million per year. Two LGUs—Quirino and Mallig—are fourth-class municipalities with an average annual income between P25 million and P35 million.

Abad said that to ensure transparency and accountability in the use of the shares, LGUs are required to submit details of the programs and for implementation based on their individual shares. LGUs must also prepare and publish quarterly reports on fund utilization and the status of project/program implementation.

A complete breakdown of the excise tax shares per province and municipality can be found in Local Budget Memoranda 72 and 73.

-From the Department of Budget and Management