Cigarette smuggling keeping BIR from hitting revenue target

Art Fuentes, ABS-CBN News

Posted at May 18 2023 07:05 PM

Courtesy Wesmincom
Smuggled cigarettes seized in Sulu earlier this year. Courtesy Wesmincom

MANILA - Cigarette smuggling remains one of the biggest headaches of the Bureau of Internal Revenue, BIR Commissioner Romeo Lumagui Jr said on Thursday. 

During the Global Anti-Illicit Trade Summit held at the Bonifacio Global City in Taguig, Lumagui said tobacco smuggling was one of the reasons why the agency was not hitting its collection target for excise taxes. 

“It’s really a huge problem. That’s why we’re very serious in our efforts in going after the illicit traders of tobacco,” said Lumagui.

The Philippine National Police also noted that after counterfeit goods, tobacco was the most common item in cross-border illicit trade. 

From January 2019 to April 2023, the PNP confiscated an estimated P1.49 billion worth of illicitly trade tobacco products.

An official of the Federation of Philippine Industries meanwhile said that an industry player has estimated that up to 70 percent of cigarettes consumed in the Philippines were likely smuggled. 

Anthony Hemsley, Japan Tobacco International’s global anti-illegal strategy director meanwhile said the high taxes on tobacco products may be pushing smokers to turn to cheaper smuggled cigarettes. 

“When a product gets pushed beyond the affordability of most people, those adults who actually make the choice to smoke and enjoy smoking, they will look elsewhere,” Hemsley said. 

Chris Humphrey, executive director of the EU-ASEAN Business Council also said that high taxes on tobacco “incentivize” smuggling. 

“Unfortunately some taxation regimes just incentivize the criminal elements,” Humphrey said. 

Meanwhile, the largest share of illicit trade in the Philippines remains counterfeit garments, bags and motor vehicle parts, according to the PNP. 

Out of the P11.7 billion in smuggled goods confiscated from January 2019 to April 2023, counterfeit goods made up over P10 billion of the total, PBGen. Romeo Caramat Jr. said. 

Onions came in third place with P137.6 million worth smuggled during the period. 

The event was hosted by the Economist Impact and supported by JTI or Japan Tobacco International.


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