A member of the House of Representatives on Monday disclosed that at least P30 billion is lost to cigarette smuggling annually.
The chairman of the House Committee on Ways and Means Chairman, Albay Rep. Joey Salceda, urged the Bureau of Internal Revenue, Bureau of Customs, and Philippine Economic Zone Authority to crack down on illicit trade of cigarettes.
“I want a crack down on the illicit cigarette trade. We are losing P30 billion annually due to this, from the laxity of enforcement,” Salceda said.
“I am invoking my oversight powers to have BOC conduct a program similar to the Run Against Tax Evaders or RATE of BIR,” he added.
During a hearing Monday, Salceda also invoked congressional oversight powers to have BIR reverse Revenue Regulation 9-2015, which exempted cigarette manufacturers from tax stamps for exports, and instead requires them to have unique identification codes.
Salceda said given that this system relies on self-declaration and regulation, it is highly prone to abuse.
“It’s a regulated product. And a violation of tax and trade rules on cigarettes is bad on its own. So, we have to be stricter with the regulatory pressure. We are very strict with crude. Cigarettes are also excised. The push of the thumb should be just as strong,” Salceda said.
During the hearing, it was also found that ecozones were used as avenues for illicit trade due to looser enforcement rules.
“It is not enough that PEZA cooperates with BIR. You have an ecozone police. You have the mandate to enforce the law in ecozones,” Salceda said in response to the statement by PEZA Director-General Charito Plaza that PEZA “cooperates with BIR and allows them to conduct inspections.”