MANILA, Philippines — The Philippines is losing an estimated amount of at least P30 billion annually due to cigarette smuggling, Albay Rep. Joey Salceda said Monday.
Salceda made the remark as he called on the Bureau of Internal Revenue (BIR), Bureau of Customs (BOC), and Philippine Economic Zone Authority (PEZA) during Monday’s online hearing of the House committee on ways and means.
Salceda serves as the chairperson of the ways and means committee.
“I want a crackdown on the illicit cigarette trade. We are losing P30 billion annually due to this, from the laxity of enforcement,” Salceda said.
In particular, Salceda said the BIR should reverse Revenue Regulation 9, which the bureau issued in 2015 that exempted cigarette manufacturers from tax stamps for exports and instead requires them to have unique identification codes (UIC).
Salceda explained that given that it relies on self-declaration and regulation, it is highly prone to abuse, especially in a highly regulated product.
“It’s a regulated product, and a violation of tax and trade rules on cigarettes is a malum in se (wrong or evil in itself). It is bad on its own. So, we have to be stricter with the regulatory pressure,” Salceda said.
“We are very strict with crude. Cigarettes are also excised. The push of the thumb should be just as strong,” the lawmaker added.
Salceda also said that the law should also be enforced in ecozones being used as avenues for illicit trade.
“It is not enough that PEZA cooperates with BIR. You have ecozone police. You have the mandate to enforce the law in ecozones,” Salceda said.
“We will definitely come up with legislated solutions after this hearing. Stricter enforcement is absolutely critical, so the policy fix will involve closing the loopholes that lighten enforcement,” he added.
According to the Department of Finance (DOF), more than half of contraband seized by the BOC in 2020 was illegal cigarettes.
The DOF said that out of the P9.75 billion in smuggled goods that the BOC seized in 2020, 53.5 percent in terms of value or P5.22-billion worth were tobacco and cigarettes.