PALO, Leyte – The Bureau of Internal Revenue (BIR) has recorded PhP 183.36 million losses in taxes due to trading of illegal cigarettes in Eastern Visayas since 2018.
BIR-Eastern Visayas Director Edith Yap said the amount represents unpaid excise taxes from smuggled cigarettes found during raids in the past six years.
“There is proliferation of illegal cigarette trade. Their products are cheaper since they don’t pay taxes. This activity hurts the tobacco industry,” Yap said in an interview Thursday.
Operatives from the Philippine National Police–Criminal Investigation and Detection Group raided warehouses with illegal cigarettes based on mission orders issued by the tax bureau.
The country applies an excise tax rate of PhP 60 per pack of 20 cigarettes.
Smuggled cigarettes are cheaper since traders do not pay taxes. These products are patronized by smokers, according to Yap.
The National Tobacco Administration (NTA) earlier said that Eastern Visayas provinces were becoming hotspots for the trade of smuggled cigarettes in the central Philippines this year.
In the Visayas region, Biliran province has the highest illicit trade incidence with 6 percent, followed by Southern Leyte with 3.7 percent as of the second quarter of the year. The two provinces had a mere 1 percent incidence in 2022.
The NTA reported that smuggled and non-tax paid cigarettes are being sold openly in stores and other public areas all over the Philippines and priced between PhP 3 and PhP 4 per stick compared to the PhP 8.55 per stick of legitimate and tax-paid cigarette brands.
The rampant tobacco smuggling has contributed to the dramatic fall in government tax revenues from the tobacco industry from a record high of PhP 176 billion in 2021 to PhP 135 billion in 2023.
Illicit tobacco trade refers to the counterfeit production or smuggling of cigarette or vapor products into the country without undergoing proper trade avenues. (PNA)