Lawmakers on Monday, March 1 demanded tighter watch in the operations of cigarette manufacturers and exporters in identified economic zones in the country after the House of Representatives received reports that these are the sources of cigarettes sold locally.
At a hearing of the the Committee on Ways and Means, House members grilled officials of the Bureau of Customs, Bureau of Internal Revenue and the Philippine Economic Zone Authority for the seemingly unabated tax evasion and smuggling activities of certain cigarette manufacturers.
Albay Rep. Joey Sarte-Salceda, ways and means panel chairman, said government loses P30 billion annually to cigarette smuggling.
Panel members questioned PEZA Director General Charito Plaza in connection with the operation of GB Bem Cigarette Company and the GB global Exprez Inc.
Nueva Ecija Rep. Estrellita Suansing noted that GB Bem has not authority to manufacture cigarette because it lacked the needed permit from the BIR.
“You approved GB Bem to operate as PEZA located notwithstanding its failure to comply with all the government requirements,” she said.
PBA Partylist Rep. Jericho Nograles disclosed hat GB Bem and GB Global are sister companies that should be closely watched by authorities.
Salceda recommended the suspension of the operations of locators in economic zones which have been linked to smuggling, tax evasion and other illicit activities.
“It is not enough that PEZA cooperates with BIR. You have an ecozone police. You have the mandate to enforce the law in ecozones,” Salceda said in response to the statement by PEZA Director-General Charito Plaza that PEZA “cooperates with BIR and allows them to conduct inspections.”
“I want a crack down on the illicit cigarette trade. We are losing P30 billion annually due to this, from the laxity of enforcement,” Salceda said.
He added: “I am invoking my oversight powers to have BOC conduct a program similar to the Run Against Tax Evaders or RATE of BIR.”
Salceda also invoked congressional oversight powers to have BIR reverse Revenue Regulation 9-2015, which exempted cigarette manufacturers from tax stamps for exports, and instead requires them to have unique identification codes (UIC).
“It’s a regulated product. And a violation of tax and trade rules on cigarettes is a malum in se. It is bad on its own. So, we have to be stricter with the regulatory pressure. We are very strict with crude. Cigarettes are also excised. The push of the thumb should be just as strong,” Salceda explained.