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Thursday, March 28, 2024

Cigarette smugglers face heftier penalties

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Lawmakers on Friday backed the proposal of Finance Secretary Carlos Dominguez to impose heftier penalties for cigarette smugglers, with one of them proposing that tobacco smuggling/counterfeiting be made a non-bailable offense.

Rep. Robert Ace Barbers of Surigao del Norte said restrictive and deterrent provisions against cigarette smuggling must be introduced, such as making it a non-bailable offense, imposing higher monetary fines and much longer jail time.

“We should impose stiffer penalties on this illicit practice of counterfeiting and charge them with economic sabotage and tax evasion. It is stealing from government coffers by not paying the right taxes or evading paying such. Congress should make this a non-bailable offense and if I had my way, in my opinion, let’s impose a capital punishment,” said Barbers, the chairman of the House committee on dangerous drugs.

Rep. Joey Sarte Salceda of Albay, the chairman of the House committee on ways and means, vowed to Dominguez that his panel will deliberate soon on the latter’s request once a formal bill is filed before the House of Representatives.

Dominguez has said his agency would want heftier penalties against unscrupulous traders of illicit cigarettes, who took advantage of higher excise taxes and a dwindling supply of tax-paid sticks at the height of the COVID-19 lockdown.

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“If you recall, when the law increasing the excise taxes on tobacco products was passed, we warned of a possible increase in illicit trade,” Dominguez said, referring to Republic Act (RA) 11346 or the Tobacco Tax Law of 2019, under which cigarette excise tax increased to P45 per pack effective Jan. 1, 2020.

Under Section 263 of the National Internal Revenue Code, persons or companies caught in possession of cigarette products that did not pay excise taxes face an imprisonment of 10 years to 12 years.

A person caught with smuggled or counterfeit cigarettes will be fined 10 times the value of the payable excise taxes or not less than P1M and a minimum jail time of 5 years. A company such as manufacturer or importer faces a minimum cash penalty of P50M and a jail time of at least eight years.

Apart from higher penalties, Salceda pushed for a “modern enforcement system” to effectively crack down illicit trade since the “syndicates won’t stop, because that’s their way of life.”

“I tend to agree that we should impose stiffer fines and penalties, but let us study national and international experience. Definitely, as soon as there is an Executive proposal, my committee will hear it urgently. That is why we always have to be ahead of them in terms of intelligence, detection, and apprehension,” said Salceda, an economist.

Meanwhile, Rep. Eric Yap of ACT-CIS party-list group, member of the House committee on ways and means and chairman of the House committee on appropriations, echoed the support to Dominguez’s proposal to include more jail time on massive shipment of smuggled goods.

“We need a stronger deterrent against smuggling and obviously, what we have right now is insufficient,” said Yap who expressed belief that both the Bureaus of Internal Revenue and Customs  have been doing a good job.

 “The mere fact that we have a steady increase of seizures of these goods proves that BOC and BIR is doing its job right. Unlike in the previous administration, the government is stepping up its efforts to combat smuggling. I will support any move to impose stiffer penalties,” added Yap.

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