The Bureau of Internal Revenue (BIR) has belied the findings of a report released in September that the Philippines is one of the top illicit cigarette markets in the Association of Southeast Asian Nations (Asean).
In a statement on Monday, the bureau highlighted the overwhelming growth in sin tax collection as an indication of the inconclusiveness of the report prepared by the International Tax and Investment Center and Oxford Economics entitled “Asia-14 Illicit Tobacco Indicator 2013.”
The report alleges that of the 105.5 billion cigarettes locally sold in 2013, 18.1 percent was attributable to illicit consumption.
“The growth in collections in sin taxes disproves the allegations that the government is losing revenues through illicit trade,” the bureau stated.
The BIR stressed that it collected a total amount of P100.9 billion in excise taxes from sin products in 2013, with the incremental revenue under the sin tax reform amounting to P51.1 billion, 81.2 percent higher compared to P55.7 billion In 2012.
The bureau also said the report used data that was incomplete and lacked proper attribution as to source.
As compared to the report, the BIR data of cigarette removals/consumption of 107.2 billion sticks (84.9 percent for domestic consumption, 1.8 percent from imports/inflows, and 13.3 percent for exports/outflows) is 1.7 billion sticks more than the Oxford Economics’ reported data of 105.5 billion sticks, inclusive of the alleged illicit 19.1 billion sticks.
Also, the 2012 BIR data of cigarette removals/consumption of 129.1 billion sticks is 20.4 billion sticks higher than the 2012 Oxford Economics’ reported data of 108.7 billion sticks removed or consumed, inclusive of the alleged illicit 6.4 billion sticks, it added.
The BIR said that it is not discounting the fact that illicit consumption of cigarettes exists as it has become a worldwide concern.
“The bureau, together with the Bureau of Customs, has been very consistent in its fight against smugglers of goods as these affect our revenues,” Commissioner Kim Jacinto-Henares said.
“We implemented various measures to counter illicit cigarette activities such as implementation of stamp tax on cigarettes. We have also acted on reports by sectors to address allegations of misdeclaration/underdeclaration, and we are strictly monitoring removals of cigarettes products to ensure that those that are sold in the market are properly taxed,” she added.