Fake cigarettes, smuggling: P16.8M/day in losses cited

TACLOBAN CITY — The Bureau of Customs (BOC) seized at least 1,500 cartons of fake cigarettes of different brands from a warehouse in this city in a case that bolstered the figures presented by the governor of the country’s tobacco capital, Ilocos Norte, about billions of pesos in taxes lost to illegal cigarette manufacturing and smuggling.

The fake cigarettes found in the warehouse here carried fake Bureau of Internal Revenue (BIR) stamps which fake cigarettes said translated to P96 million in lost government revenue.

The amount of losses that the government suffers from cigarette smuggling and fake BIR stamps was far higher, according to Ilocos Norte Gov. Imee Marcos, whose province is a top tobacco producer.

P20-B smuggling

She said in 2018 alone, at least P20 billion of cigarettes were smuggled into the country.

“The twin scourge of smuggled and fake cigarettes” hurt tobacco farmers most at an estimated cost of P60 in lost excise per cigarette pack, said Marcos in a statement.

Marcos, who is running for senator, cited a Department of Finance report saying that a single machine used for making fake tobacco products is capable of producing 480,000 packs of cigarettes per day.

Illegal cigarette manufacturing, she added, was defrauding the government of as much as P16.8 million per day.

Marcos also reiterated fears over another increase in tobacco excise, saying it “exponentially increases the incentive for tax evasion, either through smuggling or manufacture of fake tobacco products.”

12 machines

“We are killing a legitimate industry” that provided more than a million jobs, she said.

In Tacloban City, authorities also found in the warehouse at least 12 machines, worth P180 million, used in making fake cigarettes during the raid in the village of Bagacay.

Using figures cited by Marcos, the machines would be capable of producing more than 5 million packs of fake cigarettes a day.

Naig said authorities first placed the warehouse under surveillance after receiving a tip about fake cigarettes being manufactured there.

He said the seized cigarettes would be shipped to the BOC head office in Manila.

Investigators are now trying to uncover the identities of the owner of the fake cigarettes and would file criminal cases, Naig said. —REPORTS FROM JOEY A. GABIETA AND ROBERT DEJON