FIFTEENTH CONGRESS OF THE REPUBLIC 
) 
OF TI-IE PI-IILIPPINES 
) 
Second Regular Session 
) 
'11 
DCT 20 P 1 :47 
SENf.\.W 
S. No. 
~u98 
Introduced by Senator Miriam Defensor Santiago 
EXPLANATORY NOTE 
While cigarette prices in the Philippines are supposedly among the lowest in the world, 
the statistics on the prevalence of smoking in the country are also reportedly among the highest 
recorded globally. 
According to the World Health Organization, 240 Filipinos die every day due to tobacco-
related ailments. As of the latest public health records, there are now reportedly more than 17.3 
million Filipino smokers. Thus, various public health advocacy groups are pushing for higher 
tobacco taxes as the single most effective policy for reducing cigarette use and increasing tax 
revenues. However, pending sin tax bills in the Congress have prevented further regulation since 
1996. 
The cost of a pack of cigarettes can go as low as PIO.OO. Cigarettes are also commonly 
sold on a per stick basis. These low prices for cigarettes make smoking extremely affordable and 
accessible, even to the youth, despite existing laws banning the sale of cigarettes and other 
tobacco products to minors. 1 
Hence, this bill is designed to make the tax structure simple, effective, and efficient, in 
order to enhance revenue generation, as well as to curb the consumption of tobacco. The main 
features ofthe bill are the following: 
1. Provides for a unitary excise tax system for each category of tobacco products; 
2. Provides for the indexation of the tobacco excise tax to inflation to avoid erosion of 
revenues by inflation; 
I http://date]i11e.ph/2 01 1!07!0 5!h i gher -to bacco-taxes-push ed-for-heal th -revenue-reasons! 
1 


3. Removes the price classification freeze by repealing Annex D under Republic Act 
No. 9334, or the Sin Tax Law of2004; and 
4. Earmarks incremental revenues for the following: 
a. universal health coverage; 
b. disease prevention; 
c. health promotion campaigns; and 
d. support for tobacco farmers, whose livelihood may be affected by the tax. 
Lw,-
~~.v£~ ,~,,~~ 
,qJJ" MIRIAM DJfp~NSOR S1i.."rJ.TIrv 
2 


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FIFTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
Second Regular Session 
) 
'11 
OCT 20 P 1 :47 
SENATE 
S. No. 2998 
p 
Introduced by Senator Miriam Defensor Santiago 
AN ACT 
RESTRUCTURING THE EXCISE TAX ON TOBACCO PRODUCTS 
AND AMENDING FOR THE PURPOSE PERTINENT SECTIONS OF THE 
NATIONAL INTERNAL REVENUE CODE 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
5 
SECTION 1. Section144 or tile National Internal Revenue Code of 1997, as amended by 
6 
Republic Act. No. 9334, is hereby further amended to read as follows: 
7 
SEC. 144, Tobacco Products. - There shall be collected a tax of [One 
8 
peso (PI.OO)] TWO PESOS AND FIFTY CENTAVOS (P2.50) on each 
9 
kilogram ofthe following products oftobacco: 
10 
(a) Tobacco twisted by hand or reduced into a condition to be consumed in 
11 
any manner other than the ordinary mode of drying and curing; 
12 
(b) Tobacco prepared or partially prepared with or without the use of any 
13 
machine or instruments or without being pressed or sweetened except as 
14 
otherwise provided hereunder; and 
15 
(c) Fine-cut shorts and refuse, scraps, clippings, cuttings, stems and 
16 
sweepings of tobacco except as otherwise provided hereunder. 
17 
Stemmed leaf tobacco, tobacco prepared or partially prepared with or 
18 
without the use of any machine or instrument or without being pressed or 
19 
sweetened, fine-cut shorts and refuse, scraps, clippings, cuttings, stems, midribs, 
20 
and sweepings of tobacco resulting from the handling or stripping of whole leaf 
21 
tobacco shall be transferred, disposed of, or otherwise sold, without any 
22 
prepayment of the excise tax herein provided for, if the same are to be exported or 


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be used in the manufacture of cigars, cigarettes, or other tobacco products on 
which the excise tax will eventually be paid on the finished product, under such 
conditions as may be prescribed in the rules and regulations promulgated by the 
Secretary of Finance, upon the recommendation of the Commissioner. 
On tobacco specially prepared for chewing so as to be unsuitable for use 
in any other manner, on each kilogram, [Seventy-nine centavos (PO.79)] ONE 
PESO AND EIGHTY-SEVEN CENTAVOS (P 1.87). 
[The rates of tax imposed under this Section shaH be increased by six 
percent (6%) every two years starting on January 1, 2007 until January 1, 2011.] 
PROVIDED, THAT, ON 1 JANUARY 2013 AND EVERY YEAR 
THEREAFTER, THE EXCISE TAX RATES PRESCRIBED IN THIS ACT 
SHALL BE ADJUSTED ANNUALLY TO THEIR PRESENT VALUE 
USING THE CONSUMER PRICE INDEX, AS PUBLISHED BY THE 
NATIONAL STATISTICS OFFICE. 
Manufacturers and importers of tobacco products shall, within 30 days 
from the effectivity of this Act and within the first (5) days of every month 
thereafter, submit to the Commissioner a sworn statement of the volume of sales 
for each particular brand of tobacco products sold [at their establishment) for the 
three-month period immediately preceding. 
Any manufacturer or importer who, in violation of this Section, knowingly 
misdeclares and misrepresents in his or its sworn statement herein required any 
pertinent data or information shall, upon discovery, be penalized by a summary 
cancellation or withdrawal of his or its permit to engage in the business as 
manufacturer or importer of cigar or cigarettes. 
Any corporation, association or partnership liable for any of the acts or 
omissions in violation of this Section shall be fined treble the amount of 
deficiency taxes, surcharges and interest which may be assessed pursuant to this 
Section. 
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Any person liable for any of the acts and omissions prohibited under this 
2 
Section shall be criminally liable and penalized under Section 254 of this Code. 
3 
Any person who willfully aids or abets in the commission of any such act 
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or omission shall be criminally liable in the same manner as the principal. 
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If the offender is not a citizen of the Philippines, he shall be deported 
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immediately after serving the sentence, without further proceedings for 
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deportation. 
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SECTION 2. Section 145 of the National Internal Revenue Code of 1997, as amended by 
9 
Republic Act. No. 9334, is hereby further amended to read as follows: 
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SEC. 145. Cigars and Cigarettes. -
11 
(A) Cigars. - There shall be levied, assessed and collected on cigars [an 
12 
ad valorem tax based on the retail price] A TAX OF TWO HUNDRED I)ESOS 
13 
(P200.00) per cigar. [(excluding the excise tax and the value- added tax) in 
14 
accordance with the following schedule:] 
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[(I) If the net retail price per cigar is Five hundred pesos (P500) or less, 
16 
ten percent (10%); and] 
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[(2) If the net retail price per cigar (excluding the excise tax and the value-
18 
added tax) is more than Five hundred pesos (P500), Fifty pesos (P50.00) plus 
19 
fifteen percent (15%) of the net retail price in excess of Five hundred pesos 
20 
(P500.00).] 
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PROVIDED, THAT, ON JANUARY 1, 2013 AND EVERY YEAR 
22 
THEREAFTER, THE EXCISE TAX RATE PRESCRIBED HEREIN 
23 
SHALL BE ADJUSTED ANNUALLY TO ITS PRESENT VALUE USING 
24 
THE CONSUMER PRICE INDEX, AS PUBLISHED BY THE NATIONAL 
25 
STATISTICS OFFICE. 
26 
(B) Cigarettes Packed by Hand. - There shall be levied, assessed and 
27 
collected on cigarettes packed by hand a tax at the [rates prescribed below:] 
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RATE OF FOURTEEN PESOS (1'14.00) PER PACK. 
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[Effective on January 1, 2005, Two pesos (P2.00) per pack;] 
2 
[Effective on January 1, 2007, Two pesos and twenty-three centavos 
3 
(P2.23) per pack;] 
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[Effective on January 1, 2009, Two pesos and forty-seven centavos 
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(P2.47) per pack; and] 
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[Effective on January 1, 2011, Two pesos and seventy-two centavos 
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(P2.72) per pack.] 
8 
PROVIDED, THAT, ON JANUARY 1, 2013 AND EVERY YEAR 
9 
THEREAFTER, THE EXCISE TAX RATE PRESCRIBED IN THIS ACT 
10 
SHALL BE ADJUSTED ANNUALLY TO ITS PRESENT VALUE USING 
11 
THE CONSUMER PRICE INDEX, AS PUBLISHED BY THE NATIONAL 
12 
STATISTICS OFFICE. 
13 
Duly registered or existing brands of cigarettes or new brands thereof 
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packed by hand shall only be packed in thirties. ANY BRAND PACKED BY 
15 
LESS THAN THIRTIES SHALL BE TREATED AS IF IT IS PACKED BY 
16 
THIRTIES AND SUBJECTED TO THE TAX PROVIDED IN THIS ACT, 
17 
WITHOUT 
PREJUDICE 
TO 
OTHER 
ADMINISTRATIVE 
OR 
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CRIMINAL PENALTIES THAT MAY BE IMPOSED ON THE 
19 
MANUFACTURER, IMPORTER AND DISTRIBUTOR OF THE SAID 
20 
BRAND. 
21 
(C) Cigarettes Packed by Machine. - There shall be levied, assessed and 
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collected on cigarettes packed by machine a tax at the rates prescribed below: 
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EFFECTIVE ON 1 JANUARY 2012 -
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(1) IF THE NET HETAIL PHICE (EXCLUDING THE EXCISE TAX 
25 
AND THE VALUE-ADDED TAX) IS TEN PESOS (PI0.00) AND BELOW 
26 
PER PACK, THE TAX SHALL BE FOURTEEN PESOS (PI4.00) PER 
27 
PACK; 
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(2) IF THE NET RETAIL PRICE (EXCLUDING THE EXCISE TAX 
2 
AND THE VALUE-ADDED TAX) IS MORE THAN TEN PESOS (PI0.00) 
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PER PACK, THE TAX SHALL BE TWENTY EIGHT PESOS AND 
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THIRTY CENT AVOS (P28.30) PER PACK; 
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EFFECTIVE ON 1 JANUARY 2013 -
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(1) IF THE NET RETAIL PRICE (EXCLUDING THE EXCISE TAX 
7 
AND THE VALUE-ADDED TAX) IS TEN PESOS (PI0.00) AND BELOW 
8 
PER PACK, THE TAX SHALL BE TWENTY-TWO PESOS (P22.00) PER 
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PACK; 
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(2) IF THE NET RETAIL PRICE (EXCLUDING THE EXCISE TAX 
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AND THE VALUE-ADDED TAX) IS MORE THAN TEN PESOS (PI0.00) 
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PER PACK, THE TAX SHALL BE THIRTY PESOS (1'30.00) PER PACK; 
13 
EFFECTIVE ON 1 JANUARY 2014, THE TAX SHALL BE THIRTY 
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PESOS (1'30.00) PER PACK, REGARDLESS OF THEIR RETAIL PRICE. 
15 
PROVIDED, THAT, ON 1 JANUARY 2015 AND EVERY YEAR 
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THEREAFTER, THE EXCISE TAX RATE PRESCRIBED IN THIS ACT 
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SHALL BE ADJUSTED ANNUALLY TO ITS PRESENT VALUE USING 
18 
THE CONSUMER PRICE INDEX, AS PUBLISHED BY THE NATIONAL 
19 
STATISTICS OFFICE. 
20 
ALL BRANDS OF CIGARETTES EXISTING IN THE MARKET 
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AT THE TIME OF THE EFFECTIVITY OF THIS ACT SHALL BE 
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CLASSIFIED ACCORDINGLY FOR THE PROPER DETERMINATION 
23 
OF THE TAX LIABILITY IN ACCORDANCE WITH THE SCHEDULE 
24 
PROVIDED ABOVE. 
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[(I) If the net retail price (excluding the excise tax and the value-added 
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tax is below Five pesos (P5.00) per pack, the tax shall be:] 
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[Effective on January 1,2005, Two pesos (P2.00) per pack;] 
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[Effective on January 1, 2007, Two pesos and twenty-three centavos 
2 
(P2.23) per pack;] 
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[Effective on January I, 2009, Two pesos and forty-seven centavos 
4 
(P2.4 7) per pack; and) 
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[Effective on January 1, 2011, Two pesos and seventy-two centavos 
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(P2.72) pel' pack.) 
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[(2) If the net retail price (excluding the excise tax and the value-added tax 
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is Five pesos (PS.OO) but does not exceed Six pesos and fifty centavos (P6.50) per 
9 
pack, the tax shall be:) 
10 
[Effective on January 1, 2005, Six pesos and thirty-five centavos (P6.35) 
11 
per pack;) 
12 
[Effective on January I, 2007, Six pesos and seventy-four centavos 
13 
(P6.74) per pack;) 
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[Effective on January 1,2009, Seven pesos and fourteen centavos (P7.14) 
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pel' pack; and) 
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[Effective on January 1,2011, Seven pesos and fifty-six centavos (P7.56) 
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pel' pack.) 
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[(3) If the net retail price (excluding the excise tax and the value-added tax 
19 
exceeds Six pesos and fifty centavos (P6.50) but does not exceed Ten pesos 
20 
(PIO.OO) pel' pack, the tax shall be:] 
21 
[Effective on January 1,2005, Ten pesos and thirty-five centavos (PIO.3S) 
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per pack;] 
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[Effective on January I, 2007, Ten pesos and eighty-eight centavos 
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(PIO.88) per pack;) 
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[Effective on January I, 2009, Eleven pesos and forty-three centavos 
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(PII.43) per pack; and) 
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[Effective on January 1,2011, Twelve pesos (PI2.00) per pack.) 
6 


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[(4) If the net retail price (excluding the excise tax and the value-added tax 
2 
is above Ten pesos (PIO.OO) per pack, the tax shall be:] 
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[Effective on January 1, 2005, Twenty-five pesos (P25.00) per pack;] 
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[Effective on January 1,2007, Twenty-six pesos and six centavos (P26.06) 
5 
per pack;] 
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[Effective on January 1, 2009, Twenty-seven pesos and sixteen centavos 
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(P27.16) per pack; and] 
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[Effective on January 1, 2011, Twenty-eight pesos and thirty centavos 
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(P28.30) per pack.] 
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Variants of existing brands and variants of new brands of cigarettes which 
11 
are introduced in the domestic market after the effectivity of this Act shall be 
12 
taxed under the proper classification thereof based on their suggested net retail 
13 
price: Provided, however, That such classification shall not, in any case, be lower 
14 
than the highest classification of any variant of that brand. 
15 
A "variant of a brand" shall refer to a brand on which a modifier is refixed 
16 
and/or suffixed to the root name of the brand. 
17 
Duly registered or existing brands of cigarettes or new brands thereof 
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packed by machine shall only be packed in twenties. ANY BRAND PACKED 
19 
BY LESS THAN TWENTIES SHALL BE TREATED AS IF IT IS PACKED 
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BY TWENTIES AND SUBJECTED TO THE TAX PROVIDED IN THIS 
21 
ACT, WiTHOUT PREJUDICE TO OTHER ADMINISTRATIVE OR 
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CRIMINAL 
PENALTIES 
THAT MAY BE 
IMPOSED 
ON 
THE 
23 
MANUFACTURER, IMPORTER AND DISTRIBUTOR OF THE SAID 
24 
BRAND. 
25 
Any downward reclassification of present categories, for tax purposes, of 
26 
existing brands of cigars and cigarettes duly registered at the time of the 
27 
effectivity of this Act which will reduce the tax imposed herein, or the payment 
28 
thereof, shall be prohibited. 
7 


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New brands as defined in the immediately following paragraph shall 
2 
initially be classified according to their suggested retail price. 
3 
"New brand" shall mean a brand registered after the date if the effectivity 
4 
of IRA No. 8240] THIS ACT. 
5 
"Suggested net retail price" shall mean the net retail price at which new 
6 
brands, as defined above, of locally manufactured or imported cigarettes are 
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intended by the manufacturer or importer to be sold on retail in major 
8 
supermarkets or retail ontlets in Metro Manila for those marketed nationwide, and 
9 
in other regions, for those with regional markets. At the end of three (3) months 
10 
from the product launch, the Bureau of Internal Revenue shall validate the 
11 
suggested net retail price of the new brand against the net retail price as defined 
12 
herein and determine the correct tax bracket under which a particular new brand 
13 
of cigarette, as defined above shall be classified. After the end of eighteen (18) 
14 
months from such validation, the Bureau of Internal Revenue shall revalidate the 
15 
initially validated net retail price against the net retail price as of the time of 
16 
revalidation in order to finally determine the correct tax bracket under which a 
17 
particular new brand of cigarettes shall be classified. [: Provided, however, That 
18 
brands of cigarettes introduced in the domestic market between January 1, 1997 
19 
and December 31, 2003 shall remain in the classification under which the Bureau 
20 
of Internal Revenue has determined them to belong as of December 31, 2003. 
21 
Such classification of new brands and brands introduced between January 1, 1997 
22 
and December 31, 2003 shall not be revised except by an act of Congress. J 
23 
Net retail price, as determined by the Bureau of Internal Revenue through 
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a price survey to be conducted by the Bureau of Internal Revenue itself, or by the 
25 
National Statistics Office when deputized for [the] this purpose by the Bureau of 
26 
Internal Revenue, shall mean the price at which at which the cigarette is sold on 
27 
retail in at least twenty (20) major supermarkets in Metro Manila (for brands of 
28 
cigarettes marketed nationally), excluding the amount intended to cover the 
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applicable excise tax and value-added tax. For brands which are marketed only 
outside Metro Manila, the 'net retail price', shall mean the price at which the 
cigarette is sold in at least five (5) major supermarkets in the region excluding the 
amount intended to cover the applicable excise tax and the value-added tax. THE 
MAJOR SUPERMARKETS SHALL BE THOSE WITH THE HIGHEST 
TOTAL GROSS SALES IN METRO MANILA OR THE REGION, AS THE 
CASE MAY BE, AS HETERMINED BY NATIONAL STATISTICS 
OFI?ICE. 
[The classification of each brand of cigarettes based on the average net 
retail price as of October 1, 1996, as set forth in Annex 'D', including the 
classification of brands for the same products which, although not set forth in said 
Annex 'D', were registered and were being commercially produced and marketed 
on or after October I, 1996, and which continue to be commercially produced and 
marketed after the effectivity of this Act, shall remain in force until revised by 
Congress.] 
Manufacturers and importers of cigars and cigarettes shall, within thirty 
(30) days from the effectivity of this Act, and within the first five (5) days of 
every month thereafter, submit to the Commissioner a sworn statement of the 
volume of sales for each particular brand of cigars and/or cigarettes sold [at his 
establishment] for the three-month period immediately preceding. Any 
manufacturer or importer who, in violation of this Section, knowingly misdeclares 
or misrepresents in his or its sworn statement herein required any peltinent data or 
information shall, upon discovery, be penalized by a summary cancellation or 
withdrawal of his or its permit to engage in business as manufacturer or importer 
of cigars or cigarettes. 
Any corporation, association or partnership liable for any of the acts or 
omissions in violation of this Section shall be fined treble the aggregate amonnt of 
9 


1 
deficiency taxes, surcharges and interest which may be assessed pursuant to this 
2 
Section. 
3 
Any person liable for any of the acts or omissions prohibited under this 
4 
Section shall be criminally liable and penalized under Section 254 of this Code. 
5 
Any person who willfully aids or abets in the commission of any such act or 
6 
omission shall be criminally liable in the same manner as the principal. 
7 
If the offender is not a citizen of the Philippines, he shall be deported 
8 
immediately after serving the sentence, without further proceedings for 
9 
deportation. 
10 
SECTION 3. Section 131, Subsection A of the National Internal Revenue Code of 1997, 
11 
as amended by Reptlblic Act. No. 9334, is hereby further amended to read as follows: 
12 
SEC. 131. Payment of Excise TlIXes on Imported Articles. -
13 
(A) Persons Liable. - Excise taxes on imported articles shall be paid by the 
14 
owner or importer to the Customs Officers, conformably with the regulations of 
15 
the Department of Finance and before the release of such articles from the 
16 
customs house, or by the person who is fOlmd in possession of articles which are 
17 
exempt from excise taxes other than those legally entitled to exemption. 
18 
In the case of tax-free articles brought or imported into the Philippines by 
19 
persons, entities, or agencies exempt from tax which are subsequently sold, 
20 
transferred or exchanged in the Philippines to non-exempt persons or entities, the 
21 
purchasers or recipients shall be considered the importers thereof, and shall be 
22 
liable for the duty and internal revenue tax due on such importation. 
23 
The provision of any special or general law to the contrary 
24 
notwithstanding, the importation of cigars and cigarettes, distilled spirits, 
25 
fermented liquors and wines into the Philippines, even if destined for tax and 
26 
duty-free shops, shall be subject to all applicable taxes, duties, charges, including 
27 
excise taxes due thereon. This shall apply to cigars and cigarettes, distilled spirits, 
28 
fermented liquors and wines brought directly into the duly chartered or legislated 
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freeports of the Subic Special Economic and Freeport Zone, created under 
Republic Act No. 7227; the Cagayan Special Economic Zone and Freeport, 
created under Republic Act No. 7922; and the Zamboanga City Special Economic 
Zone, created under Republic Act No. 7903, and such other freeports as may 
hereafter be 
established 
or created 
by 
law: 
Provided, further, 
That 
NOTHWITHSTANDING THE PROVISION OF REPUBLIC ACT 9593, 
THE importations of cigars and cigarettes, [distilled spirits, fermented liquors and 
wines] made directly by a government-owned and operated duty-free shop, like 
ONE OPERATED BY the Duty-Free Philippines [(DFP)] CORPORATION, 
shall NOT be exempted from THE EXCISE TAX [all applicable duties only]: 
Provided, still further, That such articles directly imported by a government-
owned and operated duty-free shop, [like the Duty-Free Philippines,] shall be 
labeled 'duty-free' and 'not for resale': Provided, finally, That the removal and 
transfer of tax and duty-free goods, products, machinery, equipment and other 
similar articles other than cigars and cigarettes, distilled spirits, fermented liqnors 
and wines, from one freeport to another freeport, shall not be deemed an 
introduction into the Philippine customs territory. 
Cigars and cigarettes, distilled spirits and wines within the premises of all 
duty-free shops which are not labeled as hereinabove required, as well as tax and 
duty-free articles obtained from a duty-free shop and subsequently found in a non-
duty-free shop to be offered for resale shall be confiscated, and the perpetrator of 
such non-labeling or re-selling shall be [punishable] penalized under the 
applicable provisions of this Code. 
Articles confiscated shall be DESTROYED USING THE MOST 
ENVIRONMENTALLY FRIENDLY METHOD AVAILABLE. [disposed of 
in accordance with the rules and regulations to be promUlgated by the Secretary of 
Finance, upon recommendation of the Commissioners of Customs and Internal 
11 


1 
Revenue, upon consultation with the Secretary of Tourism and the General 
2 
Mallager of the Philippine Tourism Authority.] 
3 
The tax due on any such goods, products, machinery, equipment or other 
4 
similar articles shall constitute a lien on the article itself, and such lien shall be 
5 
superior to all other charges or liens, irrespective of the possessor thereof. 
6 
(B) Rate and Basis of the Excise Tax on Imported Articles. - Unless 
7 
otherwise specified, impolied articles shall be subject to the same rates and basis 
8 
of excise taxes applicable to locally manufactured articles. 
9 
SECTION 4. Section 288, subsections B and C of the National Internal Revenue Code of 
10 
1997, as amended by Republic Act. No. 9334, is hereby further amended to read as follows: 
11 
(B) Incremental Revenues from Republic Act No. 8240. - Fifteen percent 
12 
(15%) of the incremental revenue collected from the excise tax on tobacco 
13 
products under R.A. No. 8240 shall be allocated and divided among the provinces 
14 
producing burley and native tobacco in accordance with the volume of tobacco 
15 
leaf production. The fund shall be exclusively utilized for programs [in pursuit of 
16 
the following objectives] TO PROMOTE ECONOMICALLY VIABLE 
17 
ALTERNATIVES FOR TOBACCO FARMERS AND WORKERS SUCH 
18 
AS: 
19 
(1) PROGRAMS THAT WILL PROVIDE INPUTS, TRAINING, 
20 
AND OTHER SUPPORT FOR TOBACCO FARMERS, WHO SHIFT TO 
21 
PRODUCTION OF AGRICULTURAL PRODUCTS OTHER THAN 
22 
TOBACCO. 
23 
(2) PROGRAMS THAT WILL PROVIDE FINANCIAL SUPPORT 
24 
TO TOBACCO FARMERS WHO ARE DISPLACED OR WHO CEASED 
25 
TO PRODUCE TOBACCO VOLUNTARILY. 
26 
(3) 
COOPERATIVE 
PROGRAMS 
TO 
ASSIST 
TOBACCO 
27 
FARMERS IN DEVELOPING ALTERNATIVE PLANTING SYSTEMS, 
12 


1 
PLANTING ALTERNATIVE CROPS OR IMPLEMENTING OTHER 
2 
LIVELIHOOD PROJECTS. 
3 
[(1) Cooperative projects that will enhance better quality of agricultural 
4 
products and increase income and productivity offarmers;] 
5 
[(2) Livelihood projects, particularly the development of alternative 
6 
farming system to enhance farmer's income; and] 
7 
[(3) Agro-industrial projects that will enable tobacco faTmers to be 
8 
involved in the management and subsequent ownership of projects, such as post-
9 
harvest and secondary processing like cigarette manufacturing and by-product 
10 
utilization.] 
11 
The Department of Budget and Management, in consultation with the 
12 
Oversight Committee created under said R.A. No. 8240, shall issue the 
13 
corresponding rules and regulations governing the allocation and disbursement of 
14 
this fund. 
15 
(C) Incremental Revenues from the Excise Tax on Alcohol and Tobacco 
16 
Products. -
17 
(1) FIVE PERCENT (5%) [Two and a half percent (2.5%)] of the 
18 
incremental revenue from the excise tax on alcohol and tobacco products starting 
19 
[January 2005] 1 JANUARY 2012 shall be remitted directly to the Philippine 
20 
Health Insurance Corporation (PHIC) for the purpose of meeting and sustaining 
21 
the goal of universal coverage of the National Health Insurance Program; and 
22 
(2) FIVE PERCENT (5%) [Two and a half percent (2.5%)1 of the 
23 
incremental revenue from the excise tax on alcohol and tobacco products starting 
24 
[January 2005]1 JANUARY 2012 shall be credited AUTOMATICALLY to the 
25 
account ofthe Department of Health and constituted as a trust fund for its [disease 
26 
prevention program] HEALTH PROMOTION PROGRAMS. 
27 
[The earmarking provided under this provision shall be observed for five 
28 
(5) years starting from January 2005.] 
13 


1 
THE EARMARKS PROVIDED IN SUBSECTION C SHALL BE 
2 
OVER AND ABOVE THE ALLOCATIONS PROVIDED IN THE 
3 
GENERAL APPROPRIATIONS ACT. 
4 
TI-IE 
EXPENDITURES 
MADE 
USING 
THE 
EARMARKS 
5 
PROVIDED IN SUBSECTIONS BAND C, SHALL BE REPORTED BY 
6 
TI-IE DEPARTMENT OF BUDGET AND MANAGEMENT, PHIC, AND 
7 
THE DEPARTMENT OF HEALTH, AS THE CASE MAYBE, THROUGH 
8 
THE OFFICIAL GAZETTE AND THEIR RESPECTIVE WEBSITES. A 
9 
COPY OF THE SAID REPORTS SHALL ALSO BE SUBMITTED TO 
10 
CONGRESS. PROVIDED, THAT SUCH REPORT SHALL CONTAIN 
11 
ITEMIZED 
AND 
DETAILED 
DESCRIPTION 
OF 
THE 
SUCH 
12 
EXPENDITURES. CONGRESS SHALL MAKE A REVIEW OF THESE 
13 
EARMARKS EVERY 5 YEARS HEREAFTER. 
14 
SECTION 5. Implementing Rules and Regulations. - The Secretary of Finance shall, 
15 
upon the recommendation of the Commissioner of Internal Revenue, and in consultation with the 
16 
Secretary of Health, promulgate the necessary rules and regulations for the implementation of 
17 
this Act within sixty (60) days from effectivity of this Act. 
18 
SECTION 6. Separability Clause. - If any provision or part of this Act shall be declared 
19 
unconstitutional, any other provision not affected thereby shall remain in full force and effect. 
20 
SECTION 7. Repealing Clause. - All laws, decrees, orders, rules and regulations, or 
21 
parts thereof inconsistent with this Act are hereby repealed or amended accordingly. 
22 
SECTION 8. Effectivity. - This Act shall take effect fifteen (15) days after its publication 
23 
in at least two (2) newspapers of general circulation. 
Approved, 
/fldp 
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