Gov’t to remain vigilant against cigarette smugglers – Dominguez

Finance Secretary Carlos Dominguez has ordered newly appointed Customs Commissioner Isidro Lapeña to remain vigilant against cigarette smugglers, now that a major low-end producer is already out of business.

In an interview, Dominguez said the exit of low-end cigarette manufacturers like Mighty Corp. from the business would lead to higher cigarette prices in the market, and give rise to more smuggled tobacco products into the country.

“I think now that the lowend producers is out of the process, prices will rise. You know what will happen when prices rise? People will be incentivized to smuggle,” Dominguez said.

“So I told them, Lapeña that is something you have to watch because you know already prices will go up, there are cheap producers in other countries and they will try to smuggle it here,” he said.

In fact, Dominguez said government authorities are currently looking into a foreign brand distributed in Bulacan, which could possibly be smuggled or illegally manufactured locally.

“Have you heard of Two Moons? There are a lot in Bulacan. It says they are made in Thailand but we really don’t know, it might be in Ilocos Sur. I don’t know where it came from but we are still tracing,” Dominguez said.

The Bureau of Internal Revenue, for its part, is investigating an alleged manufacturer of fake cigarettes.

“In Bacolod, it’s not just fake tax stamps, someone is manufacturing fake cigarettes,” BIR commissioner Caesar Dulay said.

Dulay said the fake cigarettes, affixed with logos of local brands, were seized by the Criminal Investigation and Detection Group.

He said the BIR has already issued mission orders to confiscate and evaluate the said counterfeit cigarettes.

“Let’s see how the facts will turn out then we will adopt what kind of case we will file,” Dulay said.

The proliferation of smuggled and counterfeit cigarettes denies the government revenues from tax collections, such as excise tax.

In the first seven months, excise tax collections from alcohol and tobacco products rose 8.7 percent to P73.28 billion from P67.43 billion in the same period in 2016.

Of the amount, 56 percent came from tobacco excise tax, which climbed 3.5 percent to P41.03 billion from P39.63 billion a year ago.

Alcohol excise tax, meanwhile, increased 16 percent to P32.25 billion from P27.79 billion in 2016.

The total excise tax collections in the first seven months corresponds to 51 percent of the government’s excise tax collection target of P143.5 billion for the whole year.