BIR readies charges vs 57 grocery stores selling illegal cigarettes in Central Luzon

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MANILA, Philippines — Authorities escalated further what they dubbed as the “last quarter storm” trade enforcement against the sale of illegal cigarettes in Central Luzon provinces, zeroing mostly on public market wholesale stores.

Since late October, combined forces of BIR Revenue Region 4 and PNP-Criminal Investigation and Detection Group Region 3, had so far confiscated 176 master cases of various brands of illegal cigarettes from 57 wholesale stores in Pampanga, Bataan, Nueva Ecija and Zambales.

Atty. Antonio Jonathan Jaminola, director of the BIR Revenue Region 4, who issued the Mission Orders, estimated the value of confiscated items of 88,144 packs, equivalent to 1,762,880 sticks at P7.27 million.

“We need to sustain our operations in this last quarter and to carry over whatever efforts we have to the first quarter of 2023 and onwards to show to all illegal traders that we are hell-bent on our committed tasks,” Jaminola said.

The series of operations were part of BIR’s sustained Tax Compliance Verification Drive (TCVD) to curb illicit cigarette trade in the country, specifically smuggling and selling illegal cigarettes in Central Luzon.

In October, the BIR and PNP operations started in Pampanga in various public markets, which have been openly selling illicit cigarettes and seized 27,547 packs in the municipalities of Apalit, Arayat, Candaba, San Luis and Sta. Rita.

Confiscated illegal cigarettes were taken into custody and stored at the BIR Revenue Region No. 4 Office to ensure preservation pending further BIR investigation and future use in follow-up legal actions and proceedings against the culprits.

Atty. Robert Panopio, Regional Investigation Chief of the Revenue Region No. 4, Regional Investigation Division, who led all the enforcements in Central Luzon, said that aside from big-time groceries, operatives are now focusing their operations on sari-sari stores since smugglers and other illegal traders shifted their clients from big-time wholesaler stores to sari-sari stores.

Expanded operations

In November, revenue and police authorities focused on enforcement in Nueva Ecija and Bataan, expanded operations in Zambales in December, and still raging and counting. “We want to address this warning to those still engaged in illicit trade: you listen and must listen well. There will be no letup in our trade enforcement. We will run after you,” Panopio said.

On November 18, a total of 21,894 were confiscated in simultaneous raids in the towns of Hermosa, Orani and Abucay in Bataan where sixteen wholesale stores were raided.

The breakdown of seized items were: Orani with 14,008 packs, Abucay with 6,131 packs and Hermosa with 1,775 packs.

Authorities raided 10 Cabanatuan City stores and six stores in Sta. Rosa, Nueva Ecija on November 23 and November 28, respectively. A total of 5,415 packs were seized in Cabanatuan City and 7,564 packs in Sta. Rosa town, respectively.

BIR officials noted that if in Pampanga, illegal cigarettes are openly sold in the market, some of the stores they raided in Nueva Ecija were discreetly selling illegal brands. In one store where the owner denied selling illicit cigarettes, a customer approached the owner and asked for three packs of Two Moon, an illegal cigarette brand, which he claimed is being sold at P30 per pack.

While in a store in Abucay, Bataan, BIR officials could confiscate official receipts showing previous trade sale transactions and an informal handwritten inventory of illegal cigarettes.

On December 6 and 7, trade enforcement shifted to Bataan again, specifically in the towns of Orion, Limay, Balanga, Pilar, and Subic, Zambales. Balanga, Pilar and Subic had the highest number of confiscated packs.

Earlier, authorities swooped down on three stores in Sta. Rita and four stores in San Luis on October 21, all in public markets. A total of 8,250 packs were seized from seven wholesale stores.

On Oct. 24, eight stores were raided in Apalit public market, with BIR officials seizing 11,712 packs of illicit cigarettes.

The day after the Apalit raid, operatives seized another 7,124 packs from eight stores in Arayat public market.

On Oct. 28, BIR and CIDG raiders confiscated 461 packs from two stores in Candaba Public Market.

Among the brands of illegal cigarettes seized were Carnival, Journey, Fort, Modern, FarStar, Dunston, Royal, D & B, Two Moon, Liqun and RGD, which do not contain the required BIR tax stamps and/or the Philippine-mandated Graphic Health Warnings.

BIR is now preparing to file appropriate charges against the owners of the stores for committing several offenses against the National Internal Revenue Code of 1997 (Tax Code), as amended, and the BIR’s minimum price requirement, among others.

Owners of the raided stores are liable for payment of taxes due on the seized illicit cigarettes, including surcharges and penalties for all the violations of the Tax Code including, but not limited to Sec. 145 on violation on the Floor or Minimum Prices, Sec. 254 on Attempt to Evade or Defeat Tax, Sec. 258 on Unlawful Possession or Removal of Articles Subject to Excise Tax Without Payment of the Tax, Sec. 264 on Failure to Issue Receipts, Sec. 265 on Offenses relating to tax stamps.

Penalties

Under the BIR Minimum Price requirement, which pegged the price of cigarettes at P82.49 per pack, violators face a six-year jail term and a fine of P500,000.00.

Penalties for violating Sec. 145 upon conviction is a fine of not less than ten (10) times the amount of excise tax and the VAT due but not less than P200,000.00 nor more than P500,000.00. Sec. 254 imposes a fine of not less than P500,000.00 but not more than P10,000,000.00 and an imprisonment of not less than six (6) years but not more than ten (10) years.

Sec. 258, on the other hand, requires a fine of not less than P30,000.00 but not more than P50,000.00 and imprisonment of not less than two (2) years but not more than four(4) years. Sec. 263 has a fine of not more than 10 times the amount of excise tax due on the articles found but not less than P1,000,000.00 and imprisonment of not less than five (5) years but not more than eight (8) years. Sec. 264 gives a fine of not less than P1,000.00 but not more than P50,000.00 and imprisonment of not less than two (2) years but not more than four (4) years.

Lastly, Sec. 265 requires a fine of not less than P10,000,000.00 but not more than P500,000,000.00 and imprisonment of not less than five (5) years but not more than eight (8) years.

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