Early campaign vs tobacco smuggling sought ahead of sin tax passage

Senate President Juan Ponce Enrile on Thursday urged government regulators to start their campaign against tobacco and alcohol product smuggling ahead of the expected passage of the measure restructuring the excise tax on tobacco and alcohol products. “Ngayon pa lamang umpisahan na nila ang kampanya laban sa smuggling,” Enrile said during the weekly Kapihan sa Senado forum. “Magmula sa araw na ito, we have to start the campaign against smuggling on tobacco products including distilled spirits and fermented liquor.” The possibility of increased smuggling activities as a result of the passage of the sin tax bill was first mentioned by Sen. Bongbong Marcos, who said higher taxes on tobacco products could “motivate certain quarters” to start smuggling cigarettes. Enrile agreed to this. During the forum, he presented a sample of an alleged smuggled cigarette product named YunYan. “Wala tayong alam na kumpanyang nagma-manufacture ng brand na YunYan,” he said. “Paano nakapasok ito? Palagay ko lumangoy ito o kaya may factory dito sa Pilipinas na hindi alam ni [Internal Revenue Commissioner] Kim Henares na nagbebenta ng sigarilyo.” He noted that smuggling operations involving tobacco products have been ongoing in the country, only that they are done quietly. “Meron ng smuggling operations na nangyayari sa Philippines, pero quietly, hindi tina-tax.” He then warned: “'Pag hindi na napigil ang smuggling na ito sa kasalukuyang sistema ng ating taxation, ano pa kaya kapag tinaas mo nang katakut-takot ang presyo ng sigarilyo sa Pilipinas?” Of the P40 billion expected revenue from the sin tax measure, Enrile said about P2 billion will be allocated for battling smuggling operations of tobacco and alcohol products. He said the budget will be given to the Philippine Coast Guard, the Bureau of Customs and the Bureau of Internal Revenue. The Senate approved on third and final reading last week the sin tax bill, which promises government with an aggregate revenue of P39.5 billion in 2013; P45.7 billion in 2014; P52.3 in 2015; P57.7 billion in 2016; and P64.4 billion in 2017. Representatives from the Senate and House of Representatives will start meeting next week to reconcile the two chambers' versions of the bill, according to Sen. Franklin Drilon, chairman of the Senate ways and means committee. — Rouchelle Dinglasan/KBK, GMA News