Thailand
Philippines: BIR, DTI step up battle vs illicit tobacco traders
MANILA, Philippines — The Department of Finance (DOF) has directed the Bureau of Internal Revenue (BIR) to work closely with the Department of Trade and Industry (DTI) in curbing a new scheme perpetrated by illegal tobacco traders involving the suspected use of recycled tax stamps on fake cigarettes.
Finance Secretary Carlos Dominguez has ordered BIR Commissioner Caesar Dulay, during an executive committee meeting, to coordinate with the DTI in stopping this so-called practice, especially if it is determined that no permit was issued for the promo.
Dominguez also ordered the BIR chief to find out who are buying the used tax stamps.
“You better talk to the DTI and tell them that can’t be allowed,” Dominguez said during the meeting.
The BIR has discovered that some enterprising entities have come up with a promotional scheme in which tax stamps on sold cigarette packs could be exchanged for a can of sardines or a pack of noodles.
BIR deputy commissioner Arnel Guballa said illicit tobacco traders could be using the promotional scheme to gather used tax stamps which they attached on packs of fake cigarettes.
The DOF and BIR led the destruction of several machines used in the manufacture of illicitly traded cigarettes last January.
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.
To strengthen the campaign against smuggling and tax evasion, the BIR has formed a strike team tasked to crack down on illicit cigarette manufacturing and trade.
Last year, the BIR incinerated over 115 million cigarette packs worth P9 billion bearing brands manufactured by the defunct Mighty Corp.
The DOF made history in 2017 by collecting from Mighty Corp. a total of P30 billion in unpaid taxes, the biggest sum on record raised by the government from a tax settlement.
After the BIR filed three separate criminal complaints before the Department of Justice (DOJ) against Mighty for its widespread use of counterfeit tax stamps, the firm offered in July last year to shut down its operations and settle its tax liabilities.
To implement this, Mighty’s manufacturing and distribution assets were sold to Japan Tobacco for around $1 billion.
Source: https://www.philstar.com/business/2019/04/09/1908373/bir-dti-step-battle-vs-illicit-tobacco-traders#IMQvc5huAmaCHp6v.99