Illegal cigarettes new biggest threat to tobacco industry
CITY OF SAN FERNANDO— Gone are the days when counterfeit illegal cigarettes were smuggled into the country.
With the discovery of illegal cigarette factories in Pampanga and Pangasinan recently, illegal cigarettes are now made and packed clandestinely in big operations run by foreign nationals and local syndicates inside the country.
These clandestine operations remain of the biggest problems to the source of livelihood to 43,960 farmers and about 300,00 other members of their families and about 1.56-M other industry workers and dependents, summing up to an estimated 1.93-M Filipinos who all depend on the tobacco industry.
Illegal cigarettes deprive government of revenue and are hurting the country’s legitimate tobacco industry. This recent development poses a serious concern for government and the tobacco industry sector and an urgent realization for the need to further efforts against illegal cigarette trade.
There is no current data on the number of illegal cigarettes clandestinely produced by syndicates in the country. There is, however, data on illicit domestic cigarette consumption. The “Asia-11 Illicit Tobacco Indicator” study showed that the consumption of domestic illicit cigarettes nearly tripled to 17.1 billion in 2013 alone. This is a big leap from only 6.1 billion in 2012.
Even the Oxford Economics and International Tax and Investment Center said that the potential revenue loss for government from illegal cigarettes was at P15.6 billion in 2013.
Illicit cigarettes are domestically produced cigarettes; illegally sold and consumed without paying applicable taxes depriving government of revenue and run in competition with legal, taxed cigarettes in the market. Smuggled cigarettes on the other hand are produced from international sources and shipped to the Philippines or vice versa.