P3 billion lost in 3 years to cigarette smuggling

MANILA, Philippines — The government  lost nearly P3 billion in tax revenues since 2019 due to smuggling or illegal entry of cigarettes into the country.

Bureau of Customs Deputy Commissioner Teddy Raval said the BOC has intercepted a total of 127,675 master cases of illicit cigarettes since President Duterte approved Republic Act (RA) 11346 or the Tobacco Tax Law in 2019.

The estimated value of the seized cigarettes reached P9.73 billion, more than half of which was accounted for in 2020 at P5.77 billion.

Between 2019 and January 2022, the government forfeited P2.9 billion in excise revenues from the smuggling of cigarettes: P197.19 million in 2019, P1.51 billion in 2020, P1.03 billion in 2021 and P67.38 million in 2022.

Raval said smuggling activities proliferated especially at the onset of the pandemic. He said smugglers tried to take advantage of the operational restrictions put in place to contain the spread of the virus to sneak in shipments of contraband cigarettes.

Albay Rep. Joey Salceda, who chairs the House committee on ways and means, said the BOC  must scale up its monitoring of the ports, making sure that the government collects the proper revenue to finance its pandemic response.

“They (smugglers) took advantage of the mobility restrictions, including Customs restrictions, but you caught them,” Salceda said in a House hearing.

The BOC started 2022 by apprehending 2,450 master cases of illicit cigarettes worth P93.13 million, with an estimated excise value of P67.38 million in January, Raval said.

For its part, the Port of Clark reported that its confiscation of smuggled cigarettes increased by more than half to P355.54 million last year from P224.4 million in 2020. The port also confiscated P90 million worth of smuggled cigarette.

Records obtained by The STAR showed that the value of smuggled shipments nearly tripled to a record P28.43 billion in 2021 from P10.63 billion in 2020.