The rise in illicit tobacco trade during this post-pandemic period requires stricter measures and tighter coordination, according to an official of the Department of Finance (DOF).
DOF Assistant Secretary Dakila Elteen Napao, one of the conference speakers at the recent Anti-Illicit Trade Conference held in Clark, said the Bureau of Customs (BOC), in close coordination with the Philippine Coast Guard (PCG), has been strengthening its capacities for border control, prevention of smuggling and other customs fraud.
“The significant and continuous rise in illicit tobacco trade during this post-pandemic demands for stricter measures and strengthened collaboration,” Napao said.
“At checkpoints in Zamboanga, Davao and Cagayan de Oro, for instance, the BOC and Philippine National Police are closely working together on a tight watch to intercept the transport of smuggled goods via vessel and land,” Napao said.
Authorities estimate the tax revenue losses incurred by the national government annually to be P30 billion to P60 billion.
According to a Euromonitor Report, 13 percent of total tobacco products sold in the country are either counterfeit or illicit. Figures are higher in Mindanao where six out of 10 cigarettes sold in the market come from illegal sources.
Former congressman Jericho Nograles confirmed that illicit tobacco trade has been a malady that worsened due to pandemic restrictions that, ironically, affected government agencies from functioning normally given its low capacity to enforce regulations in e-commerce.
While the household budget shrank during the pandemic, the demand for cheaper goods increased, Nograles observed.
“Smokers had to look for cheaper alternatives. The situation is so bad that some retailers in Mindanao are selling a pack of illegal cigarettes at P35,” he said.
Under Bureau of Internal Revenue’s Revenue Regulation No. 7-2021, the minimum floor price per pack of cigarette is pegged at P82.49.
Pushing to declare cigarette smuggling as an act of economic sabotage and make it a non-bailable offense, Senior Deputy Majority Leader Sandro Marcos proposed to Congress the immediate approval of House Bill 3917.
The proposed law seeks to include tobacco, both in its raw form and as finished product, in the list of agricultural commodities whose illegal importation will be considered a heinous crime under the Anti-Agricultural Smuggling Act of 2016.
Under the proposed bill, cigarette smugglers face a minimum of 30 years imprisonment but not exceeding 40 years with no bail recommended.
At the same time, violators are obliged to settle a fine double the value of the seized smuggled items, plus the total amount of unpaid duties, and other taxes. – Angela Celis
