The Bureau of Internal Revenue (BIR) operatives raided a grocery in Marulas, Valenzuela City selling in wholesale and retail both smuggled and counterfeit cigarettes and confiscated a large volume of illicit items on Wednesday, July 26. The owner of the La Cruz General Merchandise told the raiding team that they were outsourcing their illicit goods from Divisoria in Manila. The BIR raiding team was led by RID supervisor Atty. Rozen Novilla and supervised by Revenue District Officer Estrella Manalo and Assistant Revenue District Officer Florita Morales. The raiding team confiscated 298 cartons of assorted brands of smuggled and counterfeit cigarettes with a total estimated market value at over P400,000. Some of the seized cigarette items are expired. Among the seized smuggled cigarettes in the Valenzuela City raid were Dunston Blue, Septwolves Black, Septwolves Red, Richman Royale Blue and Richman Royale Red. BIR operatives seized counterfeit and smuggled cigarettes from a grocery in Marulas, Valenzuela City. Counterfeit or fake cigarettes are the imitated version of legal brands in the country while smuggled cigarettes are illegally sneaked in to the Philippines from the neighboring countries. Both counterfeit and smuggled cigarettes, however, pay no excise taxes and value added taxes (VAT) to the government whoever their manufacturers or distributors are, defrauding the BIR of billions in revenue collection every year. BIR Commissioner Romeo Lumagui, Jr. said the government is losing P50 to P100 billion in tax revenues from the illicit tobacco trade, these funds are intended to finance basic services like the Universal Health Care program, infrastructure development and social services. Lumagui led a second nationwide simultaneous inspection this month of retail and wholesale stores and warehouses which are trading untaxed and illicit products. He cancelled the permit to operate of two companies in Subic Bay Freeport for manufacturing cigarettes without the necessary registration with BIR. The BIR Commissioner warned that the agency will continue to raid stores selling counterfeit and smuggled cigarettes in Metro Manila because the BIR is hell bent on its efforts to cripple the spurious operations, not only in the metropolis but nationwide. The identity of the owner of the grocery store was withheld by authorities pending further interrogation and further details from their alleged Divisoria in Manila outsource. “We have lined up more trade enforcement activities and only waiting for the final details of each case before we finally proceed with the raid,” the BIR officer said. Owners of raided stores face offenses for collection of taxes, including surcharges and penalties for all the violations of the Tax Code including, but not limited to Sec. 145 on violation on the Floor or Minimum Prices, Sec. 254 on Attempt to Evade or Defeat Tax, Sec. 258 on Unlawful Possession or Removal of Articles Subject to Excise Tax Without Payment of the Tax, Sec. 264 on Failure to Issue Receipts, Sec. 265 on Offenses relating to tax stamps. Penalties for violating Sec. 145 is a fine of not less than 10 times the amount of excise tax and the VAT due but not less than P200,000 but not more than P500,000. Sec. 254 requires a fine not less than P500,000 but not more than P10,000,000 and an imprisonment of not less than six years but not more than 10 years. Sec. 258, on the other hand, requires a fine of not less than P30,000 but not more than P50,000 and an imprisonment of not less than two years but not more than four years. Sec. 263 has a fine of not more than 10 times the amount of excise tax due on the articles found but not less than P1,000,000 and imprisonment of not less than five years but not more than eight years. Sec. 264 gives a fine of not less than P1,000 but not more than P50,000 and imprisonment of not less than two years but not more than four years. Lastly, Sec. 265 requires a fine of not less than P10,000,000 but not more than P500,000,000 and imprisonment of not less than five years but not more than eight years.