BIR Revenue Regulation 22-2003 has been the subject of a temporary restraining order issued by the courts.
In a letter to President Arroyo, the Philippine Association of Tobacco-Based Cooperatives (PATCO) is asking that the order be suspended for at least two tobacco seasons.
PATCO president Carlos Cachola pointed out that the TRO is effective only for 20 days. He said the livelihood of some 45,000 tobacco farmers is at risk because of the BIR order which will have the result of dampening the demand for cigarettes due to higher prices.
He recalled that last year, thousands of farmers suffered financial losses because the tobacco firms cut down on their purchases. If the BIR order will be implemented, some tobacco manufacturers are likely to limit their purchases further. Cachola noted that one company alone has announced that it will cut its purchases of tobacco leaves by about 15 million kilos this year if the BIR implements the higher tax rates.
Former Agriculture Secretary and Federation of Free Farmers president Leonardo Q. Montemayor said his organization is fully supportive of the tobacco farmers’ call for a suspension of the BIR order until adequate safety nets are in place to avoid the economic dislocation of thousands of tobacco farmers.