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Friday, March 29, 2024

Cigarette smuggling on the rise

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A group of traders expressed alarm over the growing incidence of cigarette smuggling in the country, saying proceeds from these activities may be financing criminal and terrorist activities.

Fight Illicit Trade chairman Jesus Arranza said the alarming “trend” started with the implementation of higher cigarette excise taxes under the Tax Reform for Acceleration and Inclusion law.

“The trend following the recent cigarette excise tax hike last January is very alarming. With cigarette prices increasing, the market is opening up to cheap smuggled goods,” Arranza, who also chairs the Federation of Philippine Industries, said in a statement.

“Through our members in the industry, we have to remain vigilant in not only going after illicit cigarettes in the market but in tracking down its source and where the proceeds are going,” Arranza said.

Arranza cited various international reports in sounding the alarm over the possible link between illicit cigarette trade and terrorist activities.

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He said that in 2002, many paramilitary and terrorist groups sought to increase their funding methods by turning to counterfeiting. The British police confirmed that “in Northern Ireland, terrorists sell counterfeit and pirated goods such as CDs, DVDs, cigarettes and branded clothing so as to fund their terrorist activities.”

The US State Department also said that the global illicit trade in tobacco was a threat to national security. It said cigarette smuggling was a lucrative crime for some terrorist groups and a potential revenue source to finance acts of terror.

The International Police said “the illicit trade in cigarettes generated significant profits for organizations listed as terrorist organizations in US. One such case, outlined the prosecution of a Hezbollah cell operating out of Charlotte, North Carolina. This cell trafficked cigarettes from North Carolina to Michigan profiting from the tax differentials between the two States.”

Arranza said the Fight IT Movement fully supported the government’s recent series of raids conducted by various revenue and enforcement agencies to stamp out the proliferation of fake, non-tax paid cigarettes in the country.

Arranza lauded the Finance Department, the Bureau of Internal Revenue, the Bureau of Customs and the PNP-Criminal Investigation Detection Group for the series of raids in different parts of the country that yielded thousands of smuggled and locally-manufactured fake cigarettes with counterfeit or no tax stamps.

Arranza said if these illicit cigarettes had found its way into the market, the government would have lost hundreds of millions in tax revenues.

A newly-formed BIR Strike Team recently raided several warehouses of fake cigarettes valued at P80 million in Manila and Malabon and an illegal factory and warehouse in San Simon Industrial Park in Pampanga with fake cigarettes worth P55 million, while the CIDG raided an illegal factory in Guiguinto, Bulacan.

Arranza said the Fight IT Movement would hold its first-ever Anti-illicit Trade Summit on May 29 at Fairmont Hotel in Makati with members of civil society, government officials and industry leaders expected to attend.

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