Anti-smuggling advocates lauded the approval on third and final reading by the House of Representatives of a bill seeking to declare as economic sabotage the smuggling of cigarettes and other tobacco products.

“The approval of House Bill 3917 is a welcome development in this time that the country is in much need of revenues due to a somehow cash trapped economy,” Jesus Arranza, chair of the Federation of Philippine Industries (FPI) and head of FIGHT IT (Illicit Trade) said.

FPI is an umbrella organization of 13 domestic industries, while FIGHT IT has been fighting for the protection of the consumers and the traders against illicit trade, specifically smuggling and the sale of smuggled products.

The House of Representatives approved Monday on third reading HB 3917 with 225 affirmative votes and no dissenting vote. Then bill aims to amend sections 3 and 4 of Republic Act No. 10845 also known as the Anti-Agricultural Smuggling Act of 1996.

HB 3917, authored by Senior Deputy Majority Leader Sandro Marcos and PBA Partylist Rep. Margarita Ignacia Nograles, seeks to consider raw or finished tobacco products as agricultural commodities, making its importation as economic sabotage.

Under the Anti-Agricultural Smuggling Act of 1996, only classified as “agricultural commodities” are rice, sugar, corn, pork, poultry, garlic, onion, carrots, fish and “cruciferous vegetables.” Tobacco, the primary raw material in manufacturing cigarettes is not classified as one.

“Government health policy objectives are distorted, since the smuggled products are unregulated. There’s a fact that is not widely known but income from the so-called sin taxes of revenues from the tobacco industry comprise of 58 percent or P94 billion of the total health budget,” Marcos said.

The presidential son further said that the tax collection from tobacco products not only strengthens funding for public infrastructure but has a direct impact as well on sustainable development goals and our universal health coverage as a country.

Nograles, for her part said there has not been any law that specifically and directly penalizing tobacco smuggling under Philippine laws.

“To this extent, government revenues are lost from smuggled, unregistered and unregulated cigarettes which are being sold via container vans shipments resulting in an estimated P26 billion annually,” Nograles said.

HB 3917 modified the provisions on jail term and penalties providing that violators face an imprison term of 30 to 40 years and a fine twice the fair value and the aggregate amount of the taxes, duties and other unpaid charges of smuggled items.

The present law provides that persons or firms caught in possession of cigarette products that did not settle excise taxes face an imprisonment of 10 to 12 years only.

The same law provides 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-year imprisonment.

“There is a need to significantly increase the penalties to deter people from venturing into illicit tobacco trade. Higher penalties also signify that the government is serious about combatting this socio-economic problem,” Nograles said.