Senior Deputy Majority Leader and Ilocos Norte Rep. Ferdinand Alexander “Sandro” Marcos and PBA Party-list Rep. Margarita Ignacia “Migs” Nograles have proposed an amendment to the Anti-Agricultural Smuggling Act of 2016 to classify cigarette smuggling as "economic sabotage", allowing for heftier penalties and fees.
The amendment would also make the illicit trade of the tobacco product non-bailable.
House Bill (HB) No. 3917 will carry stiffer and heftier penalties for tobacco “both in its raw form or as finished products” to be smuggled into the country.
This is because, under the original law that called agricultural smuggling a heinous crime, the illegal trade only covers such products as rice, sugar, corn, pork, poultry, garlic, onion, carrots, fish and "cruciferous vegetables".
“There is an urgent need to combat large-scale tobacco smuggling by imposing more stringent penalties and deter the entry and sale of illegal tobacco in the Philippines," the lawmakers said.
Under the proposed bill, cigarette smugglers would face a minimum of 30 years imprisonment but not exceeding 40 years with no bail recommended.
Violators would also be obliged to settle a fine double the value of the seized smuggled items, plus the total amount of unpaid duties, and other taxes.
The present law only imposes imprisonment of 10 to 12 years for persons or firms caught in possession of cigarette products that did not settle excise taxes.
The same law furthered that a person caught with smuggled cigarettes will be fined 10 times the value of the payable excise
taxes or not less than P1 million and a minimum of five years imprisonment.
President Ferdinand “Bongbong” Marcos Jr. declared war against rampant smuggling during his first State of the Nation Address (SONA) and ordered authorities to immediately curb the operations within their jurisdiction.
In the bill’s explanatory note, Marcos and Nograles said that there is a “growing threat” of cigarette smuggling since it deprives the government billions of pesos annually in revenues.
Marcos is from Ilocos Norte which is noted for its tobacco farming, while Nograles hails from Mindanao, which incidentally is where illicit tobacco trade is reportedly prevalent.
"If the entry and sale of smuggled cigarettes continues unrestricted, the national government stands to lose even more revenues. This will be detrimental to its pandemic recovery efforts, clearly, this is one of the biggest tax leaks that government needs to plug," they said.
Marcos cited various government statistics, which showed that the government is losing from P30 billion to P60 billion annually in revenues due to cigarette smuggling.
They highlighted how the excise taxes from tobacco allowed the government in the past two years to allot P299 billion to address the Covid-19 pandemic.
The lawmakers lamented that in several parts of the country, notably in Zamboanga del Sur and Misamis Occidental, 60 percent of the cigarettes sold in the market come from illegal sources.
Even in Marcos's turf of Ilocos Region, considered a tobacco-producing province, 10 percent of the cigarettes being sold are illicit.