DOF calls for heightened vigilance vs illicit cigarette manufacturers

PORAC, Pampanga — Department of Finance (DOF) appealed to the public to heighten their vigilance against the manufacturing and trade of illicit cigarettes.

“We are aware that with the increase in sin taxes, there will be greater incentive for evasion. This is the reason why we need to heighten our vigilance,” DOF Secretary Carlos Dominguez III said during the destruction of seized cigarette machines and materials in Porac town.

Based on figures, he said a single cigarette making machine can produce 20,000 sticks per minute which is equivalent to about 9.6 million sticks during an eight hour shift or 480,000 packs per day.

“At the present excise tax rate of PhP35 per pack, the government, by destroying these pieces of machinery, has effectively blocked attempts of being defrauded by as much as PhP16.8 million pesos per day of much-needed revenues for our Build, Build, Build program and investments in human capital,” the secretary said.

The finance exec added that after they have busted Mighty Corporation in 2017 and was taken over by Japan Tobacco, the taxes collected from the company from roughly the same volume increased by at least PhP2 billion a month.

The underground cigarette business, he said, is not only evading the payment of excise taxes but are exposing consumers to the added hazards of unregulated manufactured products.

“By getting tough against the illicit tobacco trade, the health and fiscal benefits of the sin tax reform law will be achieved for our people,” Dominguez said.

With this, he assured the public that revenue-generating agencies will be unyielding in their efforts to thwart illicit manufacturing and tax evasion.

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