THE Department of Finance (DOF) is against the lifting of the ban on alcoholic products, which was implemented by several local government units during the enhanced community quarantine (ECQ).
The Center for Alcohol Research and Development Foundation Inc. recently wrote to Ramon Lopez, trade secretary, to appeal to ease the ban imposed nationwide on the purchase and sale of alcoholic beverages.
“I am not in favor,” Carlos Dominguez, DOF secretary, told reporters via Viber yesterday .
However, Dominguez was also asked if it’s the same for cigarettes, but he said, “that’s under consideration because absence of cigarettes encourages illicit trade.”
There is no ban placed on the sale of cigarettes during the ECQ, however tobacco manufacturers in a statement yesterday recommended to allow the resumption of the production of exciseable products, such as tobacco and alcohol, so that excise taxes and value added tax may be generated by government to fund social welfare programs and for consumers not to turn to illicit products.
The manufacturers said that shortly before the March 16 lockdown, intelligence reports showed that illicit traders were ramping orders from foreign sources of illicit cigarettes which cause prices of imported cheap contraband to surge to $150 per mastercase.
“Post ECQ, the tobacco industry projects that there will be a resurgence of illicit trade. The ECQ resulted in job losses and/or a decline in incomes which favor the consumption of low-priced and tax-unpaid illicit products,” the group said.
The tobacco manufacturers however said that as a result of the ECQ, it is likely the supply chain of illicit traders had also been disrupted.
“Intelligence reports indicate that foreign workers in illicit factories returned home in late January. Because of the coronavirus outbreak, these foreigners stayed in their own country and local illicit factories remained non-operational,” they said.
“Moreover, the same intelligence reports also note that the acquisition cost abroad of illicit whites rose from $80 to $150 per mastercase in February 2020, as illicit traders scrambled to buy inventory in anticipation of supply-shortages due to the outbreak of covid19,” they added.
The manufacturers said there’s a need to be vigilant against illicit trade through sustained surveillance and enforcement activities by the government in partnership with the private sector to optimize revenues.
The group said that because of its long coastline and proximity to illicit tobacco products from neighboring countries, Mindanao will be a hotbed for the resurgence of illicit trade.
“From April 1 to 15, 2020 alone in the midst of widespread lockdowns throughout the country, there were three seaborne enforcement operations in different parts of Mindanao. These illicit operations were jointly thwarted by the Armed Forces of the Philippines and the Bureau of Customs,” the tobacco manufacturers said.
