PR/PNA
PORAC, Pampanga — Finance Secretary Carlos Dominguez III underscored the need for heightened government vigilance against the illicit manufacture and sale of tobacco products, given that the increase in “sin” taxes has incentivized illegal traders to increasingly resort to smuggling and tax evasion.
Dominguez said in a statement on Friday that the destruction here of several machines used in the manufacture of illicitly traded cigarettes forms part of the Duterte Administration’s relentless campaign against manufacturers of these products, as effectively demonstrated in 2017 when the Department of Finance (DOF), through the Bureau of Internal Revenue (BIR) and Bureau of Customs (BOC), cracked down on the “biggest fish” — Mighty Corp.
Taking down Mighty Corp. for using counterfeit excise tax stamps led to the biggest tax settlement ever in the country’s history amounting to about PHP30 billion, forcing the company to get out of the cigarette business, Dominguez recalled.
Moreover, after Japan Tobacco Inc. (JTI) took over Mighty, tobacco excise tax collections increased by at least PHP2 billion a month, he said.
“The destruction of these confiscated contraband will send a clear two-pronged message: Illicit manufacturing will not be tolerated. Tax evasion will be hounded ceaselessly,” Dominguez said.
Held at the DiGaMa Waste Management Services facility here, the event was also attended by BIR Commissioner Caesar Dulay, BIR deputy commissioner Arnel Guballa, Pampanga Vice Governor Dennis Pineda, National Bureau of Investigation (NBI) Intellectual Property Rights Division chief Glenn Ricarte, Porac police chief Supt. Crisente Tiguelo, Philip Morris and Fortune Tobacco Corp. president Lawrence Chew, and JTI Philippines general manager Manos Koukourakis.
During the event, Dominguez thanked the private sector for joining forces with the government in helping fight smuggling and tax evasion.
The destroyed contraband included units and parts of three filter maker machines, two packaging machines, and a cigarette-making machine, along with 484 master cases of various finished cigarette brands, and raw materials used in making cigarettes, such as filter rods, tipping papers, packaging foil, acetate tow, and other supplies.
The machines were bulldozed into pieces, while a grinder destroyed the cigarettes. These contraband were seized by the BIR from illegally operating cigarette factories in Pampanga and Pangasinan.
Dominguez said this would not be the first time that illicit cigarettes were destroyed, and would certainly not be the last.
