Philippines intensifies crackdown on fake cigarettes
CITING the possibility that unscrupulous manufacturers could be in cahoots with government personnel in the proliferation of fake cigarettes, Finance Secretary Carlos Dominguez has ordered the country’s two biggest tax-collection agencies to intensify their crackdown on the illegal trade.
The Department of Finance on Wednesday said that Dominguez also ordered Customs Commissioner Isidro Lapena and Internal Revenue Commissioner Caesar Dulay to “disable the confiscated machines” caught churning out counterfeit cigarettes “so that they would no longer be usable.” In particular, the department noted that the equipment that produced fake cigarettes in Luzon and Visayas seemed to have entered the country undetected.
“I want to hit them with everything you’ve got, the [BOC] and the BIR, and get to the bottom of this,” Dominguez was quoted by the department as saying during a recent meeting with officials of the two agencies.
An anticigarette smuggling “strike team” comprised of Bureau of Customs and Bureau of Internal Revenue operatives earlier reported to Dominguez that it seized one filter-making machine, four unlicensed cigarette-making machines as well as six cigarette- packing machines in Pampanga that the BIR said were smuggled.
“Two factories in Cagayan de Oro, meanwhile, yielded unregistered cigarette-making machines, packaging machines and a filter- making machine during recent operations also conducted by the BIR strike team,” the department added, such that the BIR told Dominguez that these machines “will be properly disabled to prevent their further usage.”
“You better trace where these machines came from. Who are the people behind this? How did these machines get in?” Dominguez told BOC and BIR officials.
For the BOC, Dominguez ordered the agency to find out from what country the machines originated and how the units were allowed by that country for export when these were most probably classified as “controlled items”.
Customs Deputy Commissioner Edward James Dy Buco was quoted by the department as saying that the BOC “will have the entry of these machines investigated.”
The BIR chief earlier admitted that smuggling became rampant after the government raised the excise tax slapped on cigarettes under the Tax Reform for Acceleration and Inclusion (TRAIN) Act.
Under the TRAIN law, the unitary excise tax slapped on cigarettes rose to 32.50 pesos a pack effective January 1 from 30 pesos last year.