Philippine Daily Inquirer Digital Edition

CIGARETTE SMUGGLING WORSENS AMID PANDEMIC

By Ben O. de Vera @bendeveraINQ

Cheaper cigarettes mostly smuggled from neighboring countries are proliferating in the Philippines as smokers grapple with higher domestic prices during these harder times, global cigarette manufacturing giant Japan Tobacco International (JTI) said.

In a statement, JTI senior global director for anti-illegal trade Ian Monteith said tobacco smugglers had been taking advantage of increased unemployment and reduced disposable income amid the prolonged pandemic-induced economic slump.

“COVID-19 has not prevented criminals from profiting. Rather, the pandemic has put pressure on consumers’ purchasing power and pushed them to turn to illegal products,” Monteith said.

Locally, JTI said its intelligence data showed that illegal cigarettes from Vietnam, Cambodia and other countries were reaching the Philippines “with ever-increasing frequency.” Smuggled goods were not tax-paid, hence depriving the government of revenues needed to finance the fight against COVID-19.

The latest Bureau of Customs (BOC) data showed that it had seized P1.34 billion worth of illicit cigarettes and tobacco products during the first nine months of 2021. From January to September, a total of 98 raids had been undertaken by the BOC.

Call for justice

“Despite back-to-back successful raids of warehouses, factories, container trucks and even residential houses by law enforcement agencies, the smuggling syndicates are not letting up. Illegal tobacco makers are directly stealing from the state. As legitimate businesses, we are a very effective tax collector, and clearly we can’t do that if there is an illicit problem. Illegal trade cheats everyone: governments, consumers, farmers and legitimate businesses,” JTI Philippines general manager John Freda said.

“For a country with so many islands like the Philippines, it is a huge challenge to control the problem, but the deterrents need to be stronger. Stiffer sanctions are required—we need to see people being caught and brought to justice in a way that deters others from being part of this criminal endeavor,” Freda said.

“The illegal tobacco trade is a feast for criminals who make huge profits often with very low risk of being caught and insignificant penalties. A lucrative business indeed for anyone who has the logistics in place and can copy our products and import without paying the taxes, which is unacceptable,” Freda added.

Finance and internal revenue officials had been warning that unscrupulous traders would take advantage of recent “sin” tax hikes, which in turn were supposed to finance the universal health-care program.

This year, cigarette excise tax rose to P50 per pack from P45 a pack last year, as mandated by the Tobacco Tax Law of 2019.

Illegal trade of fake and smuggled cigarettes has flourished amid the pandemic, especially last year as supply dwindled with the restricted movement of nonessential goods.

BUSINESS

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2021-10-21T07:00:00.0000000Z

2021-10-21T07:00:00.0000000Z

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Philippine Daily Inquirer