Excise tax collection below target due to illegal tobacco — BIR

By Revin Mikhael D. Ochave, Reporter

THE CONTINUED proliferation of illicit tobacco products is hampering efforts to meet the government’s excise tax collection target, the Bureau of Internal Revenue (BIR) said on Thursday.

“That’s one of the main problems with excise tax, it’s the proliferation of illicit tobacco. (There is) around a 20% shortfall for excise tax (in the first four months). A large part of that shortfall is attributable to tobacco,” Commissioner Romeo D. Lumagui, Jr. said at the sidelines of the Economist Impact’s Global Anti-Illicit Trade Summit in Taguig City.

The BIR is aiming to collect P352.9 billion from excise taxes this year.

“That’s why we’re aggressive in our enforcement activities on tobacco products,” Mr. Lumagui said.

“We will also file criminal cases against them. We issued a revenue memorandum circular on floor prices. If the prices of retail cigarettes are below the floor price, excise taxes are not paid. You cannot sell below that amount,” he added.

The BIR last week adjusted the floor prices of cigarettes, heated tobacco, vaporized nicotine, and non-nicotine products based on its new memorandum circular. The new floor price for a pack of cigarettes is now at P114.60 while a ream is at P1,146.

The circular also specified that the floor price for a pack of heated tobacco product is now P120.40, while a pod of nicotine salt is P200 for 2 milliliters (ml) and P354.97 for 4 ml.

Mr. Lumagui said the BIR will talk to online platforms and merchants for stricter guidelines in relation to illicit cigarettes.

“We’re doing our best and I’m optimistic we can get that, we’re doing everything we can. We will continue to do our raids and filing of cases involving illicit trade,” Mr. Lumagui said.

“With the cooperation of other entities, like online platforms, because a lot of online platforms allow the selling of these illicit products. With their cooperation, I’m sure it will be very helpful for us,” he added.

Meanwhile, Philippine National Police (PNP) Criminal Investigation and Detection Group Acting Director Romeo M. Caramat, Jr. said that some P11.68 billion worth of smuggled and counterfeit goods have been confiscated from 2019 to end-April 2023.

The police conducted 1,190 operations, arrested 1,511 individuals, and filed 962 cases from 2019 to end-April this year relating to the anti-illicit trade, he said.

The confiscated smuggled items with the highest value was a combination of bags, motor vehicle parts, and others worth P10.04 billion, followed by tobacco products and cigarettes at P1.49 billion, onions at P137.61 million, sugar at P858,000, and rice at P500,750.

“Illicit trade increased due to online selling, since it is being done on a cyber-platform,” Mr. Caramat said.

“We expect that there is more illicit trade happening in the country since these figures are just those that were reported to us,” he added.