Cigarette smuggling, fake tobacco products killing tobacco farmers

Ilocos Norte Gov. Imee Marcos urged the government to crack down on cigarette smugglers and manufacturers of counterfeit tobacco products who flood the market with their contraband.

“Fake cigarettes seized in 2018 hit a record-high of P20.250 billion, depriving the government of much-needed revenues,” Marcos said.

“The twin scourge of smuggled and fake cigarettes are strangling tobacco farmers who are already reeling with the impending hike in excise tax by at least P60 per pack. The looming increase in excise tax exponentially increases the incentive for tax evasion either through the smuggling of cigarettes or the manufacturing of fake tobacco products,” she lamented.

“We are killing a legitimate industry that provides livelihood to more than two million Filipinos while we let smugglers and illegal manufacturers enrich themselves by flooding the market with fake products and by depriving the government of revenues that can help our tobacco farmers,” she said.

The government had its largest haul of pirated goods last year, most of which were contraband cigarettes, the Intellectual Property Office of the Philippines bared.

The Bureau of Internal Revenue also destroyed machines and equipment used to mass-produce fake cigarettes in Pampanga and Pangasinan last month. A report by the Department of Finance states that a single cigarette-making machine is capable of producing 20,000 sticks per minute, or about 480,000 packs per day. The DOF said the illegal operation of the fake cigarette-making equipment is defrauding the government by as much as P16.8 million in revenues per day.

Marcos said that if the next round of sin tax hike pushes through, the government should help tobacco farmers cope with their potential revenue loss. “Government must not lose track of the need to help tobacco farmers. They must benefit from the increases in excise tax. The expected higher revenue from sin tax collection must be used to bankroll alternative agriculture-related livelihood for affected tobacco farmers,” she said.