The Finance Department said it considers 2018 a banner year in terms of its relentless drive against smuggling and tax evasion.
The agency said in a statement the government continued to intensify its campaign against smuggling and tax evasion through the combined efforts of the Bureau of Customs and Bureau of Internal Revenue in 2018.
It said that on the watch of Finance Secretary Carlos Dominguez III, the BIR spearheaded several raids on warehouses storing counterfeit cigarette brands, while the BoC intercepted undocumented shipments of rice, steel products, luxury cars, and other assorted goods.
The BIR, from January to November 2018, seized 5,227 mastercases of counterfeit cigarettes bearing various brands and affixed with counterfeit tax stamps.
The BoC, as of Dec. 19, confiscated P 9.271 billion worth of smuggled goods from various ports nationwide and filed 68 cases before the Department of Justice against suspected smugglers.
It also either revoked, suspended or canceled the customs accreditation of 126 importers and 15 customs brokers as part of the bureau’s intensified campaign against smuggling in 2018.
The department said of the smuggled goods intercepted by the BoC, illegal drugs accounted for the bulk of the seized items at P3.074 billion, while another P7.319 billion-worth of confiscated items were assorted goods; P56.278 million were cars and other types of vehicles; P490.26 million, agricultural products; P1.343 billion, general merchandise; P4.344 million, used clothing; P49.7 million, steel products; and 4.356 million, counterfeit goods.
The BoC was also able to foil several attempts to smuggle rice, sugar and other goods into the country, it said.
The BoC also donated a total of 374 bags of rice to the Department of Social Welfare and Development to augment the government’s disaster relief efforts for typhoon victims.
The BIR, for its part, incinerated over 230,000 mastercases or over 115 million cigarette packs bearing brands manufactured by the defunct Mighty Corp. in 2018. It earlier destroyed over 9,000 mastercases bearing the Mighty brands in the latter part of 2017.
The aggregate excise tax of the incinerated cigarettes hit P9 billion, which was part of the P30 billion tax deficiency of Mighty Corp.
These destroyed cigarettes were seized in separate operations in San Simon, Pampanga; San Ildefonso, Bulacan; Tacloban City; and General Santos City in warehouses leased by Mighty.
The Department of Finance made history in 2017 by collecting from cigarette manufacturer Mighty Corp. a total of P30 billion in unpaid taxes, the biggest sum on record raised by the government from a tax settlement, and which was the result of the heightened joint campaign by the BIR and BOC against tax cheats.
After the BIR filed three separate criminal complaints before the Department of Justice 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.
Mighty’s manufacturing and distribution assets were sold to Japan Tobacco Inc. for around $ 1 billion. As a conditionality, Mighty paid P30.4 billion (roughly equivalent to $600 million) in taxes, comprising previous tax liabilities and transaction taxes, to settle its obligations to the government.
Dominguez instructed the BoC and BIR to track down manufacturers of counterfeit tobacco products and their possible cohorts in government who had a role in allowing the entry of unlicensed cigarette-making machines into the country.
Dominguez also directed them to coordinate with officials of the country or countries of origin of these unlicensed cigarette making units to seek their cooperation in finding the people behind the illegal entry of the machines via Philippine ports.
He also ordered the BoC and BIR to disable the confiscated machines so that they could no longer be used for illicit operations.
