BIR seizes illicit cigarettes with P637 million tax liabilities

MANILA, Philippines —  The trade and sale of illicit cigarettes continue to be a government problem with the Bureau of Internal Revenue (BIR) confiscating P637 million worth of illegal cigarettes.

The BIR recently raided a cigarette factory in Cabanatuan City, Nueva Ecija where it discovered illicit cigarettes, machines, fake tax stamps, raw tobacco and other materials used in manufacturing of cigarettes.

For the latest raid, BIR said total deficiency in taxes reached P636.9 million.

The BIR likewise discovered that the operations of the factory were done at the ground floor of what seems to be a rest house.

Truck containers used as storage facilities were hidden under camouflage covers. Also discovered during the raid were other facilities such as a bunker and a firing range.

BIR commissioner Romeo Lumagui Jr. said 15 Chinese nationals were likewise arrested.

BIR continues to target large-scale cigarette traders amid the government losing billions in taxes from the illicit trade of the commodity.

“The place was also unsanitary because the raw tobacco being used in the manufacturing was merely placed on the floor where dirt and dust accumulated due to the unhygienic standards of the factory,” Lumagui said.

The manufacturers associated with the factory will face criminal and civil cases for several violations of the Tax Code including unlawful possession of cigarette papers, payment of excise tax on domestic and imported products, detention of packages containing taxable articles and offenses relating to stamps, among others.

For comparison, illicit cigarettes can be bought for as low as P350 per ream while the legitimate ones are sold at P1,750.

It is estimated that illicit trade is now at 2.026 billion stick with revenue losses likely to be at least P60.6 billion.