By Billy Begas
Two lawmakers have jointly filed a measure seeking to declare cigarette smuggling as economic sabotage.
House Bill 3917, authored by Ilocos Norte Rep. Sandro Marcos and PBA party-list Margarita Nograles seeks to amend Anti-Agricultural Smuggling Act of 2016 (Republic Act 10845).
Marcos is from Ilocos Norte noted for its tobacco farming, while Nograles hails from Mindanao where illicit tobacco trade is reportedly prevalent.
At present, agricultural smuggling is considered economic sabotage if it involves sugar, corn, pork, poultry, garlic, onion, carrots fish, and cruciferous vegetables with a minimum amount of P1 million or rice with a minimum amount of P10 million.
The bill seeks to include in the list tobacco, whether manufactured or unmanufactured, and including finish products such as cigars, cigarettes, or heated tobacco products if the minimum excise tax and value-added tax payable is in the amount of P1 million as valued by the Bureau of Customs (BOC).
Violators will be meted 30 to 40 years imprisonment and a fine of twice the fair value and the aggregate amount of the taxes, duties, and other charges avoided by the smuggled tobacco.
At present, the individuals or firms caught in possession of cigarette products that did not settle excise taxes face imprisonment of 10 to 12 years imprisonment and the fine is 10 times the value of the payable taxes.
The authors, in the explanatory note of the bill said that in Zamboanga del Sur and Misamis Occidental it was estimated that six out of 10 cigarettes sold in the market come from illegal sources.
They said that even in the tobacco-producing region of Ilocos nearly 10% of cigarettes sold are illicit.
The government is losing from P30 billion to P60 billion annually in revenues due to cigarette smuggling, according to the authors.
“If the entry and sale of smuggled cigarettes continue unrestricted, the national government stands to lose even more revenues. This will be detrimental to its pandemic recovery efforts, clearly, this is one of the biggest tax leaks that government needs to plug,” the lawmakers stressed.
