Stiffer sanctions on cigarette smuggling to boost revenues

MANILA, Philippines — The impending enactment of a law that would slap more penalties and make cigarette smuggling a non-bailable offense is seen plugging massive losses of the government as illicit tobacco trade continues to grow at alarming levels.

The local unit of tobacco product manufacturer Japan Tobacco International (JTI) said it is now anticipating the signing of the Anti-Agricultural Economic Sabotage Bill by President Marcos.

This as both houses of Congress recently ratified the bill and is up for transmission to the Office of the President.

JTI Philippines general manager John Freda said the enactment of the bill would send a strong message to smugglers of the government’s commitment to address the worsening problem of illicit tobacco trade.

“The crime of tobacco smuggling is an act of economic sabotage because it robs the nation’s coffers. Not only does it deprive the government of much needed tax revenues but illegal trade cheats everyone,” Freda said.

“Illicit tobacco trade in the Philippines is growing at alarming levels, posing a significant threat to the economy including the agricultural sector,” he said.

The impending new law classifies cigarette smuggling as an act of economic sabotage which would mean heftier penalties including making the illicit trade non-bailable.

Cigarettes will join other commodities such as rice, sugar, corn, pork, poultry, garlic, onion, carrots and fish in the economic sabotage list. This would effectively make the illegal importation of tobacco, either in raw or finished form, a heinous crime.

Tobacco smuggling as economic sabotage carries heftier penalties of life imprisonment and a fine of thrice the value of the agricultural and fishery products subject of the crime.

It is estimated that the government is now losing some P60 billion to P100 billion annually from cigarette smuggling.

Freda noted that cigarette smuggling impacts various sectors including farmers, retailers, consumers, tobacco-growing local government units, legitimate businesses and revenue collection agencies.

Worse, Freda emphasized that illegal tobacco sales often finance larger criminal activities such as corruption, smuggling of drugs and weapons, human trafficking and terrorism.

JTI Philippines is the distributor of international brands Winston, Camel and Mevius and local brands Mighty and Marvels.