BIR, BOC ordered to strengthen drive vs illicit cigarette trading

MANILA, Philippines — The Department of Finance (DOF) has directed the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) to strengthen its drive against illicit cigarette trading, which could potentially worsen following the recent increase in tobacco excise taxes.

According to Finance Secretary Carlos Dominguez, the recent passage of Senate Bill 2233, which will increase tobacco excise taxes starting next year, may exacerbate the proliferation of counterfeit and smuggled cigarettes and tax stamps in the country.

In anticipation of this, Dominguez instructed the BIR and the BOC to intensify their joint campaign against illicit cigarette trade.

“The proliferation (of illicit cigarettes and fake tax stamps), that’s going to bloom some more next year. Keep a tight watch over that,” Dominguez told BIR and BOC officials during a recent DOF executive committee meeting. 

The tobacco “sin” tax reform bill, which is now up for President Duterte’s signature, increases the excise tax of tobacco products to a unitary rate of P45 per pack by 2020. This will be followed by a series of P5 adjustments annually until the rate reaches P60 per pack in 2023.  

Starting 2020, heated tobacco and vapor products will also be taxed by P10 to P50, depending on their liquid volume.  

As part of the efforts to intensify the crackdown against illegal cigarette trading, the BIR and the BOC earlier created a joint task force against traders of smuggled and counterfeit cigarettes. 

The BIR, for its part, also created its own strike team to act as lead and point coordinator of all the agency’s enforcement activities against smuggled articles and locally manufactured counterfeit excisable products.
The BOC has also formed its own anti-smuggling task force to strengthen the monitoring and enforcement efforts against the illicit entry of goods. 

Just recently, a joint team from the BIR and the National Bureau of Investigation seized machines allegedly printing fake labels and cigarette tax stamps in a facility in Malabon City.  

The BIR also reported that it uncovered counterfeit cigarette brands and bogus tax stamps in recent raids conducted in Tacloban City, Nueva Ecija and Tarlac.