Task force vs cigarette smuggling formed

The country’s two biggest revenue agencies have formed a task force aimed at combating the proliferation of smuggled and fake cigarettes amid higher prices due to the first tax reform package.

The Bureaus of Internal Revenue and of Customs have established a so-called “strike team,” headed by BIR revenue officer Remedios Advincula Jr., “to act as lead and point coordinator of all BIR enforcement activities on smuggled articles and locally manufactured counterfeit excisable products,” the Department of Finance quoted Internal Revenue Deputy Commissioner Arnel Guballa as saying in a statement Tuesday.

“We are planning to have our MOA [memorandum of agreement] with the BOC on information sharing and coordination linkages regarding these smuggled excisable imported articles,” Guballa said in a recent report to Finance Secretary Carlos Dominguez III.

Guballa told Dominguez that there was a proliferation in the local market of smuggled imported cigarettes as well as locally manufactured cigarettes with counterfeit or no tax stamps at all.

With the strike team in place, “we have a lead coordinator now regarding this raid on fake cigarettes or no stamps in the different parts of the country—from Luzon, Visayas and Mindanao,” Guballa said.

Last month, Dominguez said the government was intensifying its campaign against the proliferation of fake and smuggled cigarettes, which could be funding terror groups and drug syndicates.

“We anticipated the increase in smuggling because we took out one of the big players. Of course, nature abhors a vacuum, so there was an opportunity and Filipinos have a lot of misplaced entrepreneurship,” Dominguez said, referring to homegrown tobacco firm Mighty Corp., which the government last year caught evading excise tax payments by using fake cigarette stamps. Mighty was eventually sold to Japan Tobacco International as part of the settlement agreement with the government, under which JTI paid the government a total of P30 billion, while the tax evasion cases filed against the Bulacan-based company were withdrawn.

In April, the BIR and the BOC’s joint strike team uncovered smuggled and fake cigarettes worth about P80 million in Malabon and Manila.

Internal Revenue Commissioner Caesar R. Dulay had said that cigarette smuggling was on the rise partly due to the Tax Reform for Acceleration and Inclusion (TRAIN) Act or Republic Act No. 10963.