The government is stepping up its campaign against illicit cigarette trade as the higher excise slapped at the start of the year, which jacked up retail prices, had emboldened unscrupulous traders.
Finance Secretary Carlos Dominguez III said the so-called strike teams of the Bureau of Customs (BOC) and Bureau of Internal Revenue (BIR) must “intensify surveillance and enforcement” against locally made or imported fake cigarettes that did not pay the correct sin taxes.
“Unfortunately, our expectations have materialized,” Dominguez said, referring to the Department of Finance and the BIR’s admission earlier that they expected illicit trade to shoot up when cigarette tax rates rise.
Under Republic Act No. 11346, or the Tobacco Tax Law of 2019, cigarette excise rose to P45 a pack effective on Jan. 1, 2020.Cigarette taxes will further increase to P50 a pack in 2021, P55 in 2022 and P60 in 2023, to be followed by a 5-percent annual indexation from 2024 onwards.
In a statement on Wednesday, the BOC said it intercepted in Caloocan City last Monday P58.45 million worth of smuggled counterfeit cigarettes.
Through a letter of authority and mission order issued by Customs Commissioner Rey Leonardo Guerrero, personnel of the BOC, the Philippine Coast Guard and the Philippine National Police, as well as Barangay 168 officials discovered nine trucks containing a total of 1,670 master cases of cigarettes.“The illegal products were identified to have brands such as Marvels, Fortune, D&B, Mighty and Jackpot cigarettes. The brands are believed to have a big market share in provinces where they are usually sold to unsuspecting patrons,” the BOC said.
The BOC is still investigating who are behind the fake cigarettes.
Meanwhile, the BIR, in coordination with barangay officials and representatives of the Intellectual Property Office of the Philippines, the National Bureau of Investigation and cigarette maker Philip Morris, on Jan. 21 served two mission orders to two cigarette warehouses in Barangay Bayabas and Barangay Cugman in Cagayan de Oro City.