Fight IT urges gov’t to intensify efforts to smoke out illegal cigarette firms

The head office of the Bureau of Internal Revenue in Quezon City. (File photo from AFP)

MANILA, Philippines — The Fight Illicit Trade (Fight IT) Movement is urging the government to go after illicit cigarette traders as it expressed alarm over the rising cases of fake cigarettes being sold nationwide.

“We need intensified intelligence gathering, sustained enforcement through more raids all the way to the successful prosecution in court of people involved in the illicit cigarette business to finally end this practice that has cost the government billions of pesos in revenues,” Jesus Arranza, Fight IT chairman, said in a statement issued on Monday.

Arranza raised the concern after the Court of Tax Appeals granted the preliminary injunction requested by GB Global Exprez Inc., a cigarette company at the Angeles Industrial Park in Pampanga which is suspected to be an illegal trader.

The court order allowed the company to get back fake cigarettes and cigarette-making machines seized from it in a raid.

According to earlier reports, the confiscated cigarettes did not contain the details of the manufacturer and destination country on the export packs, as required by law, even if the health warnings were in Thai.

The packs also did not have tax stamps, a requirement of the Bureau of Internal Revenue (BIR) as proof of excise tax payment.

Arranza, who is also chairman of the Federation of Philippine Industries (FPI), said that he was disappointed by the court ruling.

“I was told by the BIR that the seized fake cigarettes and equipment are critical to support the case filed by the BIR. These are important pieces of evidence to the case,” Arranza said.

The raid at the Global Exprez facility in Pampanga was conducted on July 29, 2020, by a team composed of members of the BIR and the National Bureau of Investigation (NBI).

Based on the account of the raiding team, Arranza said the potential loss to the government in terms of excise tax and fine from the GB Global seizure would amount to Php1.08 billion.

The raid yielded 4,786 cases containing 238,300 cigarette packs of non-BIR registered and non-compliant Two Moon and Soho brands.

According to GB Global, the cigarettes were for export, yet the product packs did not bear the destination market, the name and address of the manufacturer, and the BIR assessment number of the manufacturer and exporter.

With these violations, the BIR ordered the seizure of three cigarette-making lines and two cigarette-packing lines at the company’s facility.

The agency also found out that the Two Moon and Soho brands, which have health warnings in Thai, were not even available in Thailand. These two brands, however, were being openly sold in Central Luzon and some parts of Mindanao.

Fight IT Movement noted that it played a major role in calling public attention to the fraudulent business practices of a cigarette-maker based in Bulacan that caused a P30-billion deficiency in tax payments, the biggest tax evasion settlement in the country’s history.

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