BIR deplores uncoordinated raids by BOC of cigarette warehouses
Top officials of the Bureau of Internal Revenue (BIR) have expressed dismay and concern over the continued uncoordinated raids by the Bureau of Customs (BOC) of warehouses suspected of storing cigarettes with fake tax stamps.
"Filing of tax evasion cases in court under these circumstances will not prosper because rules and regulations were not properly observed," said one top BIR official.
Apparently in a bid to diffuse the confusion, BIR Commissioner Caesar R. Dulay announced during a dialogue with cigarette manufacturers and importers held over weekend that the bureau would soon sign a memorandum of agreement with the BOC and the National Bureau of Investigation to check the proliferation of untaxed cigarettes.
Veteran revenue officials, who requested anonymity pending results of the ongoing investigation, explained that the sole function of the BOC is to collect customs duties on imported goods and not to oversee the collection of excise tax and other internal revenue taxes due from local goods.
They said, however, the BOC may visit factories to check if imported raw materials are not smuggled.
The officials made the comment after the BOC raided a warehouse in Zamboanga last week wherein a large volume of untaxed cigarettes were seized bearing the brands of Philip Morris Fortune Tobacco Corporation and Mighty Corporation (MC), and lately the Mighty warehouse in Pampanga.
Mighty claimed the tax stamps on its products were genuine.
A separate confidential report submitted to the national office (NO) by the regional directors of Pampanga and Zamboaqnga City which was made available to the Manila Bulletin showed that raids were not properly coordinated.
The report said revenue regional officials learned about the raids only when the BOC raiders were already inside the said warehouses.
Revenue regional officials also pointed that they were not the right parties to participate in the raids but the bureau's national investigation division (tax fraud division) and the large taxpayers service (LTS) that oversees the collection of excise tax, both headquartered at NO.
Earlier, MC expressed its willingness to open all its warehouses to cooperate with the BOC for seizure of fake cigarette products should any be found within its premises.
MC executive vice president and spokesperson Oscar Barrientos, reiterated its long-standing position that it is not in the business of producing fake cigarette products as its own local brands are well-accepted by its customers.
“The company, however, bewails the use by other government agencies of mission orders of BOC to pursue schemes of its competitors to seize its products using a false pretext that fake cigarettes are stored in its warehouses because of its being in the forefront of effort to alleviate the plight of local tobacco farmers through amendatory legislation,” Barrientos said.
According to Barrientos in an interview, this is not the first time that Mighty has been subjected to a relentless demolition job by its rivals, using their contacts in the media and subjecting them to prejudgment of guilt at every opportunity, particularly at the beginning of the tax months of the year.
“In fact. they have created an unmistakable pattern of demolishing Mighty since 2013 when its low-priced products ate up a large part of its rivals’ dominant market when the sin tax reformed law took effect that year, leveled the playing field, allowed Mighty, using the economy of scales, to effectively compete with its multinational rivals and thus became one of the country’s largest taxpayers, ” Barrientos added.