Dominguez to BIR, BOC: Sue smugglers

MANILA, Philippines – Finance Secretary Carlos Dominguez III is urging the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) to file charges against those responsible for the P2.2 billion worth of smuggled and counterfeit tobacco products, shoes, and clothes that government agents seized in a series of raids over the past two weeks.

The BOC seized over P2 billion worth of smuggled and counterfeit tobacco products, including cigarette brands manufactured by Mighty Corporation that contained fake tax stamps, in raids in Pampanga and the cities of General Santos and Zamboanga in Mindanao.

"If the evidence warrants, I urge the BIR and BOC to file the appropriate charges in court as soon as possible," Dominguez said. (READ: Dominguez to BIR: Tighten monitoring of fake tax stamps)

He also wants government officials in cahoots with the erring entities included in the charge sheets if they are found to have been involved in these tax evasion bids.

"They (BOC and BIR) should speed up their investigations and also look into the possible involvement of bureaucrats acting as protectors of these large-scale tax evasion attempts," Dominguez said in a statement.

The BIR earlier said that the seized cigarettes with fake tax stamps have estimated potential excise tax losses placed at P1.1 billion.

According to Section 263 of the Tax Code, anyone found in possession of locally manufactured articles subject to excise tax, the tax on which have not been paid in accordance with law, shall be punished with a fine of not less than 10 times the amount of excise tax due on the articles found, and suffer imprisonment.

The raid conducted by customs operatives last Wednesday, March 1, on 5 warehouses at the San Simon Industrial Park in Pampanga yielded some P1.98 billion worth of counterfeit and smuggled cigarettes.

Sources said the warehouses of seized cigarettes inside San Simon Industrial Park were found to be leased to tobacco company Mighty, and that the use of the warehouses started last November.

A report by Malaya Business Insight cited a certification signed by the administrator of San Simon Industrial Park certifying that the 3 warehouse buildings owned by Hommss Trading Corporation are rented by Mighty.

Also, another certification signed by the administrator of San Simon Industrial Park showed that 2 more warehouses owned by Showplace Landed Corporation are rented by the cigarette firm.

The certifications were issued on March 1, upon the request of BIR regional director Jethro Sabariaga.

Meanwhile, in an earlier tax compliance verification campaign done by the BIR in Zamboanga City, the members of the agency's team were refused entry into one warehouse leased by Mighty, the finance department said.

The BIR said members of its team were not allowed to enter the premises despite having a valid mission order issued by its regional office. (READ: Fake cigarettes remain big challenge in PH market)

The agency said that when a team, armed with a mission order, conducted a follow-up tax compliance verification drive in one of the warehouses leased by Mighty in Barangay Lunzuran, it was refused entry by the personnel inside the building, upon the instructions of their higher management from the main office in Luzon.

The warehouse personnel were reportedly told by higher management that their company is on the list of registered Large Taxpayers and that in the absence of a written directive from the BIR National Office, the BIR raiding team could not use their Mobile Verification Devices (MVDs) to enter the building and verify the stamps attached to the cigarettes.

This development prompted the BIR regional office in Zamboanga City to recommend a nationwide verification drive in all regions, with mission orders emanating from the national office in Manila to ensure proper verification of the authenticity of internal revenue stamps (IRS) affixed on various cigarette brands.

The BOC seized 391 master cases of smuggled and/or counterfeit cigarettes in the raid, bearing the cigarette brands Mighty, Astro, and Union with an estimated value of P13.5 million.

In a separate report, the BIR informed Dominguez that verification done using the MVDs revealed that the stamps affixed on the seized items from the Zamboanga raid were indeed spurious.

Similar verification conducted in surrounding retail stores revealed that cigarettes sold there also had fake IRS, said Jose Eric Furia, the BIR Acting Regional Director for Zamboanga City, in his report.

Meanwhile, in other operations conducted by the BOC in two buildings in Pasay City, customs teams seized some P200 million worth of assorted clothing with brand names Adidas, Nike, Armour All, Vans, Lacoste, Jag, Wrangler, Under Armour, Superman, and NBA. 

Last week, the BOC also uncovered an attempt to smuggle out of the country 3 live monitor lizards, which were discovered hidden in the casing of a computer's CPU when it passed through X-ray at the FedEx Cargo Warehouse at the Ninoy Aquino International Airport.

The sender, a certain Dennis Sarmiento of Cebu City, is facing charges for violating Republic Act No. 9147 or the Wildlife Resources Conservation and Protection Act. 

The consignee for the cargo was listed as a certain Kabren Jhason of California, according to the BOC. –