QuestionsQuestions (NTA MEMORANDUM CIRCULAR NO. 61-A AMENDING MEMORANDUM CIRCULAR NO. 61)
It is an implementing guideline for Republic Act (RA) No. 7171, which promotes the development of farmers in Virginia tobacco-producing provinces by providing those beneficiary provinces a share equivalent to 15% of the excise taxes on locally manufactured Virginia-type cigarettes.
It covers the Department of Budget and Management (DBM), Bureau of Internal Revenue (BIR), National Tobacco Administration (NTA), and the provinces producing Virginia tobacco, including the LGUs (municipalities and cities) within each beneficiary province.
DBM includes in the Internal Revenue Allotment (IRA) portion of the National Expenditures Program (NEP) an amount equivalent to 15% of excise taxes on locally manufactured Virginia-type cigarettes, based on actual BIR collections for the second calendar year preceding the year of distribution (budget year).
NTA certifies Virginia tobacco production and Virginia tobacco acceptances (including details by province, district, city and municipality). DBM uses NTA certification for determining qualified beneficiary provinces and their shares.
The circular requires average annual Virginia tobacco production not less than one million kilos (using the certified production data approved by the NTA Administrator).
DBM determines qualified provinces based on their average annual production for the immediate past two (2) years, with the initial year for the computation starting in 1991 and onwards.
Each province’s pro-rata share is based on its annual volume of adjusted Virginia tobacco acceptances for the immediate past year as certified by NTA; “immediate past year” means two years preceding the budget year (e.g., if 1994 is budget year, use 1992 data).
BIR must collect and set aside the equivalent of 15% of the excise tax collection on locally manufactured Virginia-type cigarettes for the second calendar year preceding the year of distribution.
BIR must submit a certification to DBM not later than April 15 of the current year, to support budget preparation and allocation in the General Appropriations Act process.
DBM releases shares directly to the LGUs of beneficiary provinces monthly by issuing a funding check, using quarterly Advice of Allotment and cash allocation, subject to usual cash programming procedures and budgetary constraints.
The LGUs (province, cities, and municipalities) proportionately receive their share from the province’s total share according to the allocation scheme stated in the circular (notably Sections 3.3.3 and related provisions).
30% to the provincial government; 40% to municipalities and cities (50% equally among all municipalities/cities, and 50% based on tobacco production volume); and 30% to municipalities and cities in congressional districts in consultation with district representatives, with each district’s share based on tobacco production volume.
The circular provides that 50% of all shares accruing to LGUs must be used for barangay economic development projects.
LGUs must record separately the receipts and disbursements of funds to account for balances of released funds.
Projects implemented by LGUs must be duly approved by their legislative councils (Sangguniang Bayan, Panlalawigan Panglungsod) through an appropriation ordinance or resolution.
The shares of LGUs of beneficiary provinces are treated as a special account under the general fund of the LGUs of provinces.
Cooperative projects to enhance product quality and market/production and increase farmers’ income; livelihood projects including alternative farming systems; agro-industrial projects including participation of tobacco farmers in management and ownership (post-harvest and secondary processing such as cigarette manufacturing and by-product utilization); and infrastructure projects such as farm-to-market roads.
It shall take effect immediately.