The local unit of Japan Tobacco International (JTI) expressed support for the proposed measure declaring cigarette smuggling as an act of economic sabotage.
John Freda, JTI Philippines general manager, said the proposed bill, once passed into law, will put more teeth into the government’s effort to curb illegal tobacco trade and plug the massive revenue losses.
Under House Bill 3917, it seeks to include tobacco in the list of agricultural commodities whose illegal importation will be considered a heinous crime under the Anti-Agricultural Smuggling Act of 2016.
Tobacco will join rice, sugar, corn, pork, poultry, garlic, onion, carrots, fish and "cruciferous vegetables” in the “economic sabotage” list.
Cigarette smuggling as economic sabotage also carries stiffer and heftier penalties, including making the illicit trade non-bailable, according to the proposed measure.
HB 3917 was filed by Presidential son and Senior Deputy Majority Leader Sandro Marcos and PBA Party-List Rep. Margarita Ignacia Nograles.
“We view this as a necessary step to make this crime an act of economic sabotage because put simply it robs the nation’s coffers, which is still reeling from a long-drawn out pandemic,” Freda said.
“Not only does it deprive government of much needed tax revenue at this time, but illegal trade cheats everyone: society, consumers and legitimate businesses,” he added.
Freda stressed cigarette smuggling is a complex problem, and not the victimless crime it is often perceived to be since it impacts a raft of industries, sectors, agencies and livelihoods.
Furthermore, proceeds from illegal tobacco sales often finance much larger criminal activities such as corruption, smuggling of drugs and weapons, human trafficking and terrorism.
He said state programs and projects fully or partially dependent on tobacco revenues diminished by unabated smuggling and counterfeiting – have also fallen victim.
In their explanatory note, the bill proponents stressed the urgency of addressing this issue as a "growing threat," since cigarette smuggling deprives government of between P30 billion and P60 billion pesos annually in revenues.
The lawmakers said 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 while in the Ilocos Region, 10 percent of cigarettes being sold are illicit.
“JTI Philippines has previously called for stiffer sanctions against cigarette smuggling, which has become more rampant even at the height of the COVID-19 pandemic and despite intensified action on the part of law enforcement,” Freda said.
Under the proposed bill, cigarette smugglers will also face a minimum of 30 years imprisonment but not exceeding 40 years with no bail recommended.
At the same time, violators are obliged to settle a fine double the value of the seized smuggled items, plus the total amount of unpaid duties, and other taxes.
The measure has just hurdled first reading approval in the House of Representatives and was referred to the House agriculture committee.