A TOP official of the Federation of Philippine Industries (FPI) lauded the City Government of Davao for its relentless efforts against smuggling that led to the confiscation of some P12.6 million worth of fake cigarettes in what seemed to be the biggest enforcement raid ever in the "country's history" involving tobacco products conducted on December 3 to 4, 2015.
In his letter to City Mayor Rodrigo Duterte, Jesus Lim Arranza, chair of FPI and Fight Illicit Trade Coalition, cited the city as a model for safety and compliance with laws and regulations.
"This raid in Davao City is a significant success and development in the fight against illicit trade in the Philippines considering that it has yielded the most volume in any cigarette enforcement raid in Philippine history," he wrote.
He added that the illicit trade is multi-billion dollar enterprise perpetrated by vast criminal networks "which span borders, resulting in the evasion of taxes and presenting a wide range of serious consequences for economies and societies worldwide."
In a report earlier, the Bureau of Customs-Enforcement Group (BOC-EG) seized 501 shipping cases, or equivalent to 5 million cigarettes, of various fake brands of Marlboro, More, Fortune, Philip Morris, Jackpot, Hope, and other assorted tobacco products in different warehouses in the city.
Some samples of the these fake cigarettes were then brought to Philip Morris Philippines, Inc. (PMPI) for examination but the tobacco firm said it did not recognize the brands and "were not produced by or with their permission."
Citing World Health Organization (WHO) report, Arranza emphasized that illicit tobacco trade is a massive problem, with annual volume estimated to be around 600 billion cigarettes worldwide.
"In the Philippines, one in every five cigarettes consumed, is illicit, that is either counterfeit or smuggled," he said.
To address the illicit trade, the Bureau of Internal Revenue (BIR) passed Revenue Regulation No. 7-2014, which requires "the affixture of tax stamps on all cigarette packs, whether manufactured locally or importer, beginning April 2015."
Citing World Bank report on Philippines' Sin Tax, he noted that 96.1 percent of the cigarette packs in the country bear requisite BIR tax stamps.
Arranza also encouraged Duterte to use his influence against smuggling and illicit trade of tobacco products to influence Davao del Sur strengthen its efforts to increase its tax stamp compliance after having recorded the lowest among the provinces in the country with 70.4 percent.
Bulacan, Quezon, Pampanga, and Pangasinan are the provinces to be fully compliant while Metro Manila was 99.8 percent.
He said taxes derived from tobacco products are allocated for social programs and projects of the Department of Health (DOH).
"I am hopeful that you will be able to lend your encouragement and support in rallying the Davao Region into full tax stamp compliance and ultimately defeating illicit trade in your area," he said. (ALC)