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DOF calls for vigilance vs illicit cigarette makers

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PORAC, Pampanga – The Department of Finance (DOF) aired a warning that the underground cigarette business is not only evading the payment of excise taxes but is exposing consumers to the added hazards of unregulated manufactured products.

Finance Secretary Carlos Dominguez III also made an appeal to the public to heighten their vigilance against the illegal manufacturing and trade of cigarettes.

“We are aware that with the increase in sin taxes, there will be greater incentive for evasion. This is the reason why we need to heighten our vigilance,” Dominguez said during the destruction of seized cigarette machines and materials here recently.

Based on figures, he said a single cigarette- making machine can produce 20,000 sticks per minute which is equivalent to about 9.6 million sticks during an eight-hour shift or 480,000 packs per day.

“At the present excise tax rate of P35 per pack, the government, by destroying these pieces of machinery, has effectively blocked attempts of being defrauded by as much as P16.8 million pesos per day of much-needed revenues for our Build, Build, Build program and investments in human capital,” the secretary said.

Dominguez added that after they busted Mighty Corp. in 2017 and was taken over by Japan Tobacco, the taxes collected from the company from roughly the same volume increasedorts by least P2 billion a month.

Aside from evading payment of taxes, the underground cigarette business is also exposing consumers to health hazards, Dominguez warned.

“By getting tough against the illicit tobacco trade, the health and fiscal benefits of the sin tax reform law will be achieved for our people,” he added.

With this, he assured the public that revenue- generating agencies will be unyielding in their efforts to thwart illicit manufacturing and tax evasion.

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