BIR expands fake stamps probe to cover all industry players

Mighty Corporation, the country’s oldest and Filipino-owned cigarette manufacturer, on Tuesday described as fair and laudable the new Bureau of Internal Revenue (BIR) order to expand its fake stamps investigation to cover all industry players including market leader Philip Morris Fortune Tobacco Corporation (PMFTC).

In a statement, retired Regional Trial Court Judge Oscar P. Barrientos, Mighty vice president and spokesman, said Mighty has no problems with neither the BIR nor the Bureau of Customs in welcoming their probe because its operation has always been transparent and in accordance with laws.

Mighty has dismissed allegations that it was using fake strip stamps, claiming that the BIR is closely monitoring production and withdrawal at its only factory in Bulacan, the first one to install CCTV cameras to monitor its operations in compliance with BIR regulations.

“It is unfair to single out Mighty. We should also investigate others to get to the bottom of the problem and determine where the counterfeits are coming,” BIR Deputy Commissioner for Legal Service Jesus Clint Aranas said.

He said that BIR is expanding its probe into the widespread use of fake tax stamps on cigarette packs to cover all manufacturers and importers.

Aranas said the government is losing billions of pesos in revenues yearly through this tax avoidance scheme as evidenced by seizure of large cache of various brands affixed with fake strip stamps since the requirement was reintroduced three years ago.

“It is not only here that Philip Morris is being investigated for fraud,” Barrientos said, adding that in Thailand and South Korea it is also being probed for multi-million dollar fraud and tax evasion cases, respectively. In Thailand, the fraud case carries a massive fine of up to $2.27 billion.

The BIR restored the use of tax stamps in 2014 to tighten monitoring and enforcement of the sin tax law and collect the right amount of excise, income and value added taxes from this source.

Mighty, in coordination with BIR, the Bureau of Customs, the National Bureau of Investigation and the police spearheaded the campaign against fake cigarettes using bogus stamps all over the country as early as two years ago that resulted in the arrest, indictment of scores of people and the seizure of large quantities of fake Mighty cigarettes and other brands in Cebu, Cagayan de Oro, Zamboanga provinces, Davao provinces, Ilocos provinces, Nueva Ecija, Isabela, Cagayan, Pampanga and Bulacan, among others.

PMFTC said in a statement that it “welcomes any investigation into the proliferation of fake tax stamps on cigarette packs.  We hope The Bureau of Internal Revenue will closely examine the entire manufacturing and distribution supply chain to ensure 100% compliance and take swift enforcement action where needed.”