PEZA probes 2 cigarette producers

The Philippine Economic Zone Authority (PEZA) is currently investigating two PEZA-registered enterprises engaged in manufacturing cigarettes for 100 percent export, which were allegedly found to be deficient in compliance with Bureau of Internal Revenue (BIR) requirements for cigarette manufacturers. 

GB-BEM and GB Global, both PEZA locators were recently the subject of raids conducted by the BIR for operating without the requisite BIR registration and other permits required in cigarette manufacturing. The matter is also the subject of parallel investigations by the BIR as well as the House Committee on Ways and Means. 

In a statement, PEZA said it had earlier withheld import shipments of these enterprises until a Writ of Preliminary Injunction was issued by the courts. PEZA will apply its own rules and regulations on penalties applicable to these enterprises based on the results of its own investigation. This is distinct and different from whatever penalties BIR may impose upon these enterprises. 

PEZA Director General Charito “Ching” Plaza said that in order to protect government interests and ensure PEZA ecozone locators’ compliance, the agency will be holding talks this week with BIR Commissioner Caesar R. Dulay, together with the representative of the Department of Finance (DOF) in the PEZA Board, DOF Undersecretary Antonette C. Tionko. The talks are aimed at strengthening PEZA’s assistance to BIR in its monitoring and compliance requirements by further integrating into PEZA systems BIR requirements that are not yet part of PEZA’s processes, including those pertaining to PEZA-registered export enterprises manufacturing cigarettes and tobacco products that are exporting 100 percent of their production. 

PEZA has also initiated talks with Bureau of Customs (BOC) Commissioner Rey Leonardo Guerrero to strengthen collaboration between PEZA and BOC and to resolve other PEZA and BOC concerns in relation to the movement of goods of PEZA enterprises and other BOC requirements. 

Plaza noted that PEZA already has existing systems in place in collaboration with both BIR and the BOC, which have been proven effective in regulating other locators.  She cited the example of JT International Asia Manufacturing Corp, which engages in so-called “best practices” and fully compliant with PEZA, BIR, NTA and BOC requirements.  

Nevertheless, she said the agency will look further to plug remaining gaps in the system. 

The Director General said that in order to enhance PEZA’s smuggling prevention efforts, PEZA is strengthening its intelligence capability and will continue to coordinate and collaborate with BOC and BIR to protect government revenues.  PEZA will also closely coordinate with the PNP, AFP, LGUs and other agencies of government not only to protect government revenues but also to ensure trust and confidence of investors in our processes, and their safety inside the PEZA ecozones. PEZA, she says further, is now in the process also of enhancing its automated systems to include monitoring and compliance requirements.