Drive vs. smuggling, tax evasion shifts to high gear in 2018

MANILA -- The government continued to intensify its campaign against smuggling and tax evasion through the combined efforts of the Bureaus of Customs (BOC) and of Internal Revenue (BIR) in 2018.

On the watch of Finance Secretary Carlos Dominguez III, the BIR spearheaded several raids on warehouses storing counterfeit cigarette brands, while the BOC intercepted undocumented shipments of rice, steel products, luxury cars and other assorted goods, the Department of Finance (DOF) said in a statement on Monday.

The BIR, from January to November 2018, has seized 5,227 master cases of counterfeit cigarettes bearing various brands and affixed with counterfeit tax stamps.

In 2018, the BOC, as of Dec. 19, has seized PHP9.271 billion worth of smuggled goods from various ports nationwide and filed 68 cases before the Department of Justice (DOJ) against suspected smugglers.

The BOC has also revoked, suspended or canceled the customs accreditation of 126 importers and 15 customs brokers as part of the bureau’s intensified campaign against smuggling in 2018.

Of the smuggled goods intercepted by the BOC, illegal drugs accounted for the bulk of the seized items at PHP3.074 billion, while another PHP7.319 billion-worth of confiscated items were assorted goods; PHP56.278 million were cars and other types of vehicles; PHP490.26 million, agricultural products; PHP1.343 billion, general merchandise; PHP4.344 million, used clothing; PHP49.7 million, steel products, and 4.356 million, counterfeit goods.

The BOC was also able to foil several attempts to smuggle rice, sugar and other goods into the country.

In keeping with Dominguez's directive, the BOC has already donated thousands of bags of rice to the Department of Social Welfare and Development (DWSD) to augment the government’s disaster relief efforts for typhoon victims.

The BIR, for its part, incinerated over 230,000 master cases or over 115 million cigarette packs bearing brands manufactured by the defunct Mighty Corp in 2018. It earlier destroyed over 9,000 master cases bearing the Mighty brands in the latter part of 2017.

The aggregate excise tax of the incinerated cigarettes totaled some PHP9 billion, which was part of the PHP30 billion tax deficiency of Mighty Corp.

These destroyed cigarettes were seized in separate operations in San Simon in Pampanga, San Ildefonso in Bulacan, Tacloban City, and General Santos City in warehouses leased by Mighty.

The DOF made history in 2017 by collecting from cigarette manufacturer Mighty Corp. a total of PHP30 billion in unpaid taxes, the biggest sum on record raised by the government from a tax settlement, and which was the result of the heightened joint campaign by the BIR and BOC against tax cheats.

After the BIR filed three separate criminal complaints before the Department of Justice (DOJ) against Mighty for its widespread use of counterfeit tax stamps, the firm offered in July last year to shut down its operations and settle its tax liabilities.

To implement this, the firm’s manufacturing and distribution assets were sold to Japan Tobacco Inc. (JTI) for around USD1 billion. As a conditionality, Mighty Corp. paid around PHP30.4 billion (roughly equivalent to USD600 million) in taxes, comprising previous tax liabilities and transaction taxes, to settle its obligations to the government.

To step up the campaign against illicit tobacco products, Dominguez has instructed the BOC and BIR to track down manufacturers of counterfeit tobacco products and their possible cohorts in government who had a role in allowing the entry of unlicensed cigarette-making machines into the country. (DOF PR)

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http://www.pna.gov.ph/articles/1057750
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