CITY OF SAN FERNANDO—Alarmed with the recent discovery and confiscation of fake cigarettes and tax stamps, the Bureau of Internal Revenue (BIR) Revenue Region 4 (RR4) has vowed to run after illegal cigarette sales in the region.
BIR regional director Jethro Sabarriaga said that the presence of illegal cigarettes presents a clear danger to the people and runs in competition with legitimate cigarette production. He said that illegal cigarettes deprive the government of revenue.
The BIR recently reported the confiscation of 5.5 million pieces of fake unused cigarette strip stamps worth approximately P175 million in excise taxes and VAT (value added tax) and machinery capable of producing millions illicit cigarette sticks.
“These machineries can produce millions of sticks and deprive government of excise taxes,” Sabarriaga said.
Sabarriaga said that the RR4’s Regional Investigation Division (RID) is now focused on monitoring the sale of illegal cigarettes in the region. The BIR can implement search and seizure of illegal cigarettes.
Sabarriaga said that the recent confiscation in Lubao town presents a large scale production capable of producing 4 million sticks or 200, 000 packs a day.
According to Sabarriaga, the taxpayer who owns the feed mill where the raid was conducted had registered with the BIR as a hog mill feed operator last October 2016.
“The machines seized are capable of producing 200,000 packs of cigarettes per day and supplies and stamps in warehouse are estimated to be good for one month's production. The stamps appear to be imported and with Chinese characters,” Sabarriaga said.
Sabarriaga said that the fake stamps could be consumed in less than a month.
Chinese national named Mark Bryan Chan bought the land last February and built a warehouse last September using local construction workers. On October 29, village officials checked the site and found a single corn crusher.
Chief Supt. Aaron Aquino, Central Luzon police director, said the materials and equipment found inside the factory indicated that the facility was engaged in the full production of cigarettes including packaging. Big boxes of dried tobacco leaves had markings showing these to be imported.
Aquino said Chan and his cohorts may be sued for violating intellectual property rights and taxation laws. Boxes of apparently fake tax seals were seen in the factory.
Criminal cases are currently being filed against the owner of the feed mill.