Customs seizes P18M worth of smuggled cigarettes

MANILA, Philippines – The Bureau of Customs seized P18 million worth of smuggled Marlboro cigarettes at the Port of Manila, the agency said in a statement Thursday, October 31.

Customs said a 40-footer van containing the fake cigarettes from China was seized at the Manila International Container Port as customs personnel tightened surveillance of imported goods this Christmas season.

The shipment, consigned to trading company Transocean Export Sales, was misdeclared as mono acetate filter rods.

“Misdeclaration, as defined in the Tariffs and Customs Code of the Philippines, is outright smuggling. Thus, value declaration is no longer an issue in determining whether an alert order should be issued or not as all misdeclared shipments are subject to immediate seizure by the government,” said Customs chief Ruffy Biazon.

Increased smuggling was a concern when the government was deliberating on plans to raise excise taxes on tobacco and alcohol, also known as “sin” products.

The government implemented in January the Sin Tax Reform Law, which aims to reduce consumption of said products – especially among the young and poor – by raising their prices through higher taxes.

Higher taxes help government generate more revenues and fund public health care.

Tobacco companies, which strongly opposed the tax hike, warned government that smuggling might increase.

In June, PMFTC Corporation, the merged entity of Philip Morris and Lucio Tan’s Fortune Tobacco Corporation and maker of the Marlboro and Philip Morris cigarette brands, reported it took a huge hit from smuggled products.

PMFTC said its sales volume for the first quarter of 2013 went down over 40%.

Internal Revenue Commissioner Kim Henares however dismissed PMFTC’s claim. She said the company’s shares fell because other players have grown their market shares.

The Sin tax Reform Law ensures a level playing field by removing a price classification freeze that favored old brands, collapsing the tax tiers from 4 to 2, and setting a uniform tax rate for all brands by 2017.

“The duty for cigarette importations was raised primarily to raise revenues for the government and to discourage smoking by making it more expensive to smoke. The BOC will, therefore, never allow cigarette smuggling to flourish,” noted Biazon. – Rappler.com