CLARK FREEPORT – The Department of Finance (DOF) reported yesterday that of smuggled goods intercepted by the Bureau of Customs (BOC) in 2018, the bulk was comprised of illegal drugs worth about P3.074 billion.
In a year end report, the DOF said that this year up to Dec. 19, the BOC had seized P 9.271 billion worth of smuggled goods from various ports nationwide and filed 68 cases before the Department of Justice (DOJ) against suspected smugglers.
The report also said the Bureau of Internal Revenue (BIR), from last January to November, had seized 5,227 master cases of counterfeit cigarettes bearing various brands and affixed with counterfeit tax stamps.
“Under the watch of Finance Sec. Carlos Dominguez III, the BIR spearheaded several raids on warehouses storing counterfeit cigarette brands, while the BOC intercepted undocumented shipments of rice, steel products, luxury cars and other assorted goods,” the report said.
It noted that “the government continued to intensify its campaign against smuggling and tax evasion through the combined efforts of the Bureaus of Customs and of Internal Revenue in 2018.”
Apart from the P 3.074 billion worth of illegal drugs intercepted by the BOC, another P7.319 billion worth of assorted smuggled items were seized, including P56.278 million worth of cars and other types of vehicles; P490.26 million worth of agricultural products; P1.343 billion worth of general merchandise; P4.344 million worth of used clothing; P49.7 million worth of steel products, and P4.356 million worth of counterfeit goods.
“The BOC has also either revoked, suspended or cancelled the customs accreditation of 126 importers and 15 customs brokers as part of the bureau’s intensified campaign against smuggling in 2018,” the report said.
The BOC was also able to foil several attempts to smuggle rice, sugar and other goods into the country and donated a total of 374 bags of rice to the Department of Social Welfare and Development (DWSD) to augment the government’s disaster relief efforts for typhoon victims.
The BIR, for its part, incinerated over 230,000 mastercases or over 115 million cigarette packs bearing brands manufactured by the defunct Mighty Corp. in 2018. It earlier destroyed over 9,000 mastercases bearing the Mighty brands in the latter part of 2017, the DOF report said.
“The aggregate excise tax of the incinerated cigarettes totaled to some P9 billion, which was part of the P30 billion tax deficiency of Mighty Corp. These destroyed cigarettes were seized in separate operations in San Simon, Pampanga, San Ildefonso, Bulacan, Tacloban City, and General Santos City in warehouses leased by Mighty,” it said.
The report also noted that “the DOF made history in 2017 by collecting from cigarette manufacturer Mighty Corp. a total of P30 billion in unpaid taxes, the biggest sum on record raised by the government from a tax settlement, and which was the result of the heightened joint campaign by the BIR and BOC against tax cheats.”
“After the BIR filed three separate criminal complaints before the Department of Justice against Mighty for its widespread use of counterfeit tax stamps, the firm offered in July last year to shut down its operations and settle its tax liabilities,” the DOF added.
It said that “to implement this, Mighty’s manufacturing and distribution assets were sold to Japan Tobacco Inc. (JTI) for around $1 billion. As a conditionality, Mighty paid around P30.4 billion (roughly equivalent to $ 600 million) in taxes, comprising previous tax liabilities and transaction taxes, to settle its obligations to the government.”
“To step up the campaign against illicit tobacco products, Finance Sec. Carlos Dominguez has instructed the BOC and BIR to track down manufacturers of counterfeit tobacco products and their possible cohorts in government who had a role in allowing the entry of unlicensed cigarette-making machines into the country,” the report noted.
Dominguez also directed them to coordinate with officials of the country or countries of origin of these unlicensed cigarette making units to seek their cooperation in finding the people behind the illegal entry of the machines via Philippine ports.
He also ordered the BOC and BIR to disable the confiscated machines so that they could no longer be used for illicit operations.
“To increase patrols in the country’s porous borders, Dominguez also spearheaded efforts to ensure that at least four fast patrol vessels acquired by the government with the assistance of France would be jointly by the BOC and Philippine Coast Guard (PCG) in the enforcement of laws pertaining to border control, prevention of the entry of smuggled goods, and prevention and suppression of smuggling and other customs fraud,” the DOF report said.
The report quoted Doinguez as pointing out that “eradicating smuggling is so crucial because, for one, the billions of pesos in annual revenue losses from this illicit activity could have been enough for the government to kick-start its overdue infrastructure modernization program long before the Duterte administration had implemented its ‘Build, Build, Build’ initiative.”