Tax collections from tobacco products increased by nearly three-fourths as of mid-February this year after one cigarette manufacturer commenced the operation of its new facility in Batangas, the Bureau of Internal Revenue (BIR) said.
In a statement, BIR Deputy Commissioner Arnel Guballa reported to Finance Secretary Carlos G. Dominguez III that tobacco excise tax collections reached P29.1 billion as of Feb. 18, 2020, higher by 73 percent compared with P16.77 billion in the same period last year.
“Noticeably, we have a big increase in the collection of tobacco excises because JTI opened its plant in Lima, Batangas,” Guballa told Dominguez during a recent meeting.
JTI’s cigarette factory in Batangas is now in full operation, Guballa said.
From February 1 to 18, he said the bureau has collected P17.57 billion, already above the P16.85 billion collection target for the month. Of that total, JTI paid P10.94 billion in excise taxes.
JTI’s February tax payment is 108 percent more than the P5.25 billion it paid in January.
“JTI Philippines overtook Philip Morris Fortune Tobacco Co. (PMFTC) as the top tobacco excise taxpayer, with JTI’s remittance of P10.94 billion accounting for 62 percent of the total collection of P17.57 billion for the Feb. 1-18 period,” Guballa was quoted as saying.
Meanwhile, JTI has called for greater international and national collaboration between governments, law enforcement agencies and industry across Asia in order to stem the tide of illegal tobacco caused by excessive increases in tobacco duty.
Appearing at a major regional trade summit, JTI also called on policy makers to do more to incentivize responsible behavior by adopting long-term and balanced tax policies, including moderate and predictable tax increases.
“There needs to be greater international and national collaboration,” Mark Hosty, Anti Illicit Trade Office (AITO) Director for Asia Pacific/Middle East-North East and Turkey region at JTI, said in a statement.
“Countries must see the threats and clamp down on them, even if these illicit products are not destined for their country. Criminals don’t respect borders and that’s why governments, law enforcement, and the industry must work together to stem the tide of illicit goods,” he added.
The counterfeit goods market in Association of Southeast Asian Nations (ASEAN) is worth over $35.9 billion, with $3.3 billion in tax revenue lost annually from smuggled cigarettes, JTI cited.
Hosty further noted that most smuggling operations are multi-jurisdictional as he expressed hopes that countries in the ASEAN region can work together in harmonizing their respective legislations so that all parties can work together in the same way.
Illegal cigarettes from Vietnam, Cambodia and other countries reach the Philippines borders with ever-increasing frequency.
The biggest cache of fake cigarettes on record was apprehended by the Bureau of Customs in July last year of P187 million worth of smuggled cigarettes from China.