AAC Tax Code.

The financial support given by the National Government for the beneficiary provinces shall be constituted and collected from the proceeds of fifteen percent (15%) of the excise taxes on locally manufactured Virginia-type of cigarettes, but not exceeding Seventeen billion pesos (P17,000,000,000.00) notwithstanding the provision of Section 3 of R.A. No. 7171.⁴¹⁴

The funds allotted shall be divided among the beneficiary provinces pro-rata according to the volume of Virginia tobacco production.

Provinces producing Virginia tobacco shall be the beneficiary provinces under Republic Act No. 7171: Provided, however, That to qualify as beneficiary under R.A. No. 7171, a province must have an average annual production of Virginia leaf tobacco in an amount not less than one million kilos: Provided, further, That the Department of Budget and Management (DBM) shall each year determine the beneficiary provinces and their computed share of the funds under R.A. No. 7171, referring to the National Tobacco Administration (NTA) records of tobacco acceptances, at the tobacco trading centers for the immediate past year.

The Secretary of Budget and Management is hereby directed to retain annually the said funds equivalent to fifteen percent (15%) of excise taxes on locally manufactured Virginia-type cigarettes, but not exceeding Seventeen billion pesos (P17,000,000,000.00) notwithstanding the provision of Section 3 of R.A. No. 7171,⁴¹⁵ to be remitted to the beneficiary provinces qualified under R.A. No. 7171.

The provisions of existing laws to the contrary notwithstanding, the fifteen percent (15%) share from government revenues mentioned in R.A. No. 7171, but not exceeding Seventeen billion pesos (P17,000,000,000.00) notwithstanding the provision of Section 3 of R.A. No. 7171,⁴¹⁶ and due to the Virginia tobacco-producing provinces shall be directly remitted to the provinces concerned.

Provided, That this Section shall be implemented in accordance with the guidelines of Memorandum Circular No. 61-A, dated November 28, 1993, which amended Memorandum Circular No. 61, entitled ‘Prescribing Guidelines for Implementing Republic Act No. 7171’, dated January 1, 1992 and that the funds to be utilized to further advance self-reliance and expand viable alternatives for Virginia-tobacco farmers and workers through:

(1) Cooperative projects that will enhance better quality of products, increase productivity, guarantee the market and as a whole increase farmers’ income;

(2) Livelihood projects particularly the development of alternative farming systems to enhance farmers’ income;

(3) Agro-industrial projects that will enable tobacco farmers in the Virginia tobacco-producing provinces to be involved in the management and subsequent ownership of these projects such as post-harvest and secondary processing like cigarette manufacturing and by-product utilization;

(4) Infrastructure projects such as farm-to-market roads, bridges, schools, hospitals, rural health facilities, and irrigation systems;

(5) Programs and projects that will promote, enhance, and develop the tourism potential of Virginia tobacco-growing provinces; and

(6) Programs that will provide financial assistance for tobacco farmers that were displaced or who cease to produce tobacco.⁴¹⁷

Provided, further, That in addition to the local government units mentioned in the above circular, the concerned officials in the province shall be consulted as regards the identification of projects to be financed.