Revenues from the country’s tobacco likely reached USD7.3 billion last year, Bureau of Internal Revenue (BIR) Commissioner Romeo Lumagui Jr. said on Tuesday.
“The Philippines, as one of Asia’s developing economies, is home to an active tobacco industry, whose revenues are projected to reach US$7.3 billion in 2024,” Lumagui said during the second day of the International Tobacco Agricultural Summit at the SEDA Vertis North in Diliman, Quezon City.
Lumagui said the local tobacco industry is expected to grow at an annual rate of 2.67 percent from 2024 to 2029.
He also cited the industry’s contribution to the economy, noting that in 2023 alone, taxes from tobacco products reached more than PHP134 billion.
Lumagui, however, said that the strong potential for revenues has prompted a growing number of unscrupulous groups and individuals to exploit the increasing demand for tobacco and tobacco-related products.
“Such exploitation is behind the illicit trade in tobacco products, which has been exposed as a major scourge of the economy itself. We are all aware of the various ways through which illicit trade undermines and eventually destroys not only the economy, but society itself,” he said.
“Illicit trade floods the market with substandard products that can be hazardous to public well-being, and forces unfair competition on legitimate enterprises. On another front, the proceeds of illicit trade have been known to fund organized crime, and possibly even local terrorist groups,” he added.
Lumagui assured the public that the BIR is ramping up efforts to combat the illicit trade of tobacco products.
He said the BIR’s operations not only focus on traditional tobacco products such as cigars and cigarettes but also vapes.
Lumagui disclosed that in March last year, BIR operatives, in collaboration with the PNP-CIDG Laguna Provincial Field Unit, raided a warehouse in San Pablo City, resulting in the arrest of two individuals and the confiscation of 102,900 bottles of Flava vape products, with total tax deficiency amounting to PHP75 million.
It also conducted a large-scale raid of three warehouse factories in Indang and Dasmariñas, both in Cavite, and recovered master cases of cigarettes, sacks of raw tobacco, and fake internal revenue stamps with tax liabilities amounting to PHP5.4 billion.
Lumagui said the BIR also conducted a raid of three warehouses in Manila and Rizal Province in late March 2024, which saw the confiscation of more than 63,000 illicit vape products with an estimated corresponding tax liability of PHP151 million.
Another coordinated raid was conducted in several locations in Agusan del Sur and Surigao del Sur provinces, during which close to 350,000 packs of illicit cigarettes with a corresponding tax liability of at least PHP219 million were confiscated.
Lumagui said BIR operatives likewise simultaneously raided four large-scale manufacturers of illicit cigarettes in Clark, Pampanga last September with a total of more than PHP8 billion in tax liabilities initially computed following the discovery of illicit cigarettes and unregistered machines.
The Bureau also conducted a raid at the Philippine Vape Festival of 2024 on August 18 and confiscated more than 5,000 illicit vape products, all of which bore no internal revenue stamps.
“I have no doubt that the illicit traders from all sectors of the economy will continue to indulge in their nefarious practices. The Bureau, however, stands ready to meet whatever challenge they may pose to us, for in the final analysis, it is the well-being and the future of our people that is at stake in the war against illicit trade,” Lumagui said. (Anna Leah Gonzales, PNA)
