The Fight Illicit Trade (Fight IT) movement has lauded the efforts of the government to stamp out the proliferation of fake, nontax paid cigarettes, and reiterated that it should remain vigilant against cigarette smuggling.
Fight IT Chairman Jesus L. Arranza has expressed concern over the growing incidence of illicit cigarette trade in the country, due to the increase in the price of cigarette packs following the implementation of higher excise tax rates for tobacco.
“The trend following the recent cigarette excise tax hike in January is very alarming. With cigarette prices increasing, the market is opening up to cheap smuggled goods,” said Arranza, who also chairs the Federation of Philippine Industries.
He also pointed out that the illegally generated funds from smuggled cigarettes may be financing criminal and terrorist activities.
Arranza cited studies from different parts of the world depicting the possible linkage of funds generated from cigarette smuggling aiding terrorist activities.
A report published by the Union des Fabricants in France for 2017 titled, “Counterfeiting and Terrorism 2017,” British police noted that many paramilitary and terrorist groups have sought to increase their funding methods by turning to counterfeiting since 2000.
In a report of the United States Department of State titled, “The global illicit trade in tobacco: A threat to national security,” it said that cigarette smuggling “is a lucrative crime for some terrorist groups and a potential revenue source to finance acts of terror; and it expands black markets and encourages a convergence between organized crime, terrorist groups and other threat networks.”
Arranza applauded the Department of Finance (DOF) and the revenue-collection agencies of the country namely, the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC), as well as the Philippine National Police-Criminal Investigation Detection Group (CIDG), for its series of raids in different parts of the country which yielded thousands of smuggled and locally-manufactured fake cigarettes with counterfeit or no tax stamps.
He said the government would have lost hundreds of million pesos in tax revenues, had the illicit cigarettes found its way into the local market.
“Through our members in the industry, we have to remain vigilant in not only going after illicit cigarettes in the market but in tracking down its source and where the proceeds are going,” Arranza added.
He commended the initiative of the DOF to forge an agreement with cigarette manufacturers for joint and sustained efforts to go after illicit cigarette traders.
The BIR Strike Team recently raided several warehouses of fake cigarettes valued at P80 million in the areas of Manila and Malabon, and an illegal factory and warehouse in San Simon Industrial Park in Pampanga with fake cigarettes worth P55 million.
The BOC earlier intercepted at the Manila International Container Port a 40-foot container van from China that carried P18.5 million worth of smuggled imported cigarettes.
He added that the Fight IT movement will hold its first-ever Anti-illicit Trade Summit on May 29 at the Fairmont Hotel in Makati with members of civil society, government officials and industry leaders expected to attend. The gathering is expected to launch a wider advocacy with the creation of the Anti-Crime Council of the Philippines.
Earlier, the BIR told the DOF that it is moving forward with the signing a memorandum of agreement (MOA) with the BOC on information sharing regarding smuggled excisable products entering the country.
“We are planning to have our MOA with BOC on information sharing and coordination linkages regarding these smuggled excisable imported articles,” BIR Deputy Commissioner Arnel S.D. Guballa said in his report to Finance Secretary Carlos G. Dominguez III.
Image credits: Nonie Reyes