Govt to lose P20B in cigarette taxes due to illicit trade – tobacco exec

February 18, 2018 - 9:26 PM
File photo from the DOF shows boxes of cigarettes stored in one of Mighty Corp.’s warehouses in the Philippines. Fake Mighty cigarettes, unearthed in recent NBI raids, are eating into the government's revenues and the bottomline of the real Mighty cigarette makers, Japan Tobacco Inc. Philippines. FILE PHOTO FROM D.O.F.

MANILA – The government is seen to lose about PHP20 billion worth of taxes from cigarette products this year alone due to the continued proliferation of illicit products.

Policemen and officials of the National Bureau of Investigation (NBI) confiscated Thursday an estimated PHP4 million worth of alleged illicit cigarettes in two separate raids conducted in Barangay 35 and Singcang-Airport in Bacolod City.

Last week, boxes of counterfeit products of Mighty Corp. and PMFTC, Inc., which produces Philip Morris among others, were discovered in a cigarette factory illegally operating in the province of Bulacan.

Manos Koukourakis, general manager of JTI Philippines, which bought Mighty Corp., said they have discovered that 50,000 to 60,000 cases of Mighty cigarettes with fake tax stamps are being sold on a monthly basis.

“This is alarming for our business interest,” he said in a text message.

The JTI Philippines head said they have no idea “how these 50K-60K are peddled in the market neither where they are produced”.

“All we know is that the fake Mightys are out there eating from our volumes and our livelihood,” he said.

Koukourakis expressed his commitment to provide intelligence information to authorities to address the illicit cigarette trade, noting that for every PHP1 billion in gross revenues the government makes PHP800 million in taxes.

“The raid in Bulacan and the raid yesterday in two main warehouses in Bacolod (are) proof of what actually happens, actions not words, and what follows,” he said.

“The government may suffer losses worth PHP20 billion this year and we, the legitimate tobacco industry, have a huge responsibility to support the government and the good efforts of the Secretary of Finance, the BIR (Bureau of Internal Revenue) and the BOC (Bureau of Customs),” he added.