Economy

Philippine tobacco traders face P1.8-B tax complaints

ROMEO LUMAGUI JR. — PHILIPPINE STAR/ERNIE PENAREDONDO

By John Victor D. Ordoñez, Reporter

THE PHILIPPINES’ Bureau of Internal Revenue (BIR) on Thursday filed 69 complaints for tax evasion worth  P1.8 billion against tobacco traders caught during a nationwide raid in January.

“This is a warning against all illicit traders,” Internal Revenue Commissioner Romeo D. Lumagui, Jr. said in a statement. “The BIR will not only raid your stores and warehouses, but we will also file criminal cases against you. This will not be the last.”

The raid was the first of its kind in the agency’s history, he added.

The tax bureau chief told reporters at the Department of Justice (DoJ) said he expects the criminal cases and recent raids to deter more traders from conducting these illegal businesses.

Authorities had confiscated counterfeit cigarette products that might have been made with dubious and unsafe materials, he said.

“We obtained information that the suppliers of these illicit traders could be large crime syndicates, and hopefully we will know who these are soon,” Mr. Lumagui said in Filipino.

Last week, he said the widespread peddling of illegal tobacco products is hampering government efforts to meet its excise tax collection target of P352.9 billion this year.

“We issued a revenue memorandum circular on floor prices,” he said on the sidelines of a trade summit on May 18. “If the prices of retail cigarettes are below the floor price, excise taxes are not paid.”

Earlier this month, the BIR 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 P114.60, while a ream costs P1,146.

Mr. Lumagui said his agency would partner with online platforms and merchants to impose stricter guidelines on illicit cigarettes.

Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said the state should enforce stricter tax collection measures to reach its collection target this year.

“Through intensified collections based on current tax laws, the government can further structurally increase its recurring tax revenue collections,” he said in a Viber message.

The BIR set a collection target of P2.6 trillion this year, 11% higher than collections last year.

In February, the tax bureau filed 74 tax evasion complaints worth P3.5 billion against several companies and people with large liabilities.

This was part of its Run After Tax Evaders (RATE) program, which requires revenue officials to go after delinquent taxpayers and help in their prosecution.

In December, the BIR filed a P1.2-billion tax evasion case against five vape traders in a crackdown against sellers of illicit cigarettes and vaping products.

In March, the agency filed criminal complaints against four suspected “ghost” corporations that issued fake receipts, which cost the government about P25.5 billion in revenue losses.

“The BIR protects the Philippine economy by leveling the playing field,” Mr. Lumagui said. “Everybody has to pay taxes and failure to do so would force us to raid your stores and file criminal cases against you.”

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Most Popular

Your daily news source covering investing ideas, market stocks, business, retirement tips from Wall St. to Silicon Valley.

Disclaimer:

TheProficientInvestor.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice.
The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 TheProficientInvestor. All Rights Reserved.

To Top