BIR shuts down cigarette factory

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The Bureau of Internal Revenue (BIR) has closed down the factory of an illegal manufacturer of various cigarette brands in Lubao, Pampanga and confiscated 5.5 million pieces of fake unused cigarette strip stamps worth about P175 million in excise taxes and value-added tax (VAT).

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This is according to BIR Regional Director Jethro Sabarriaga in his report to BIR Commissioner Caesar Dulay and was disclosed to the media on Monday.

“The machines and other materials for tobacco manufacture were put under the custody of the NTA [National Tobacco Administration],” he said in his report.

The raided factory was registered with the BIR as a hog mill feed operator.

Sabarriaga said the confiscated machines are capable of producing 200,000 packs of cigarettes per day and supplies and stamps in the warehouse are estimated to be good for one month’s production, the report said.

“The stamps appear to be imported and with Chinese characters,” Sabarriaga said.

Launched in 2014, the stamps tax system or the Internal Revenue Stamps Integrated System is the issuance of tax stamps on cigarette packs, aimed to improve the BIR’s excise tax collections on tobacco products.

The permanent stamps replaced the easily detachable stickers currently placed on cigarette packs sold in the country.

The stamp tax system is in accordance with the provisions of Republic Act 8240, which amended certain sections of the National Internal Revenue Code in 1996.

Latest BIR data showed that tax revenue from tobacco dropped by 11.9 percent in April this year to P4.88 billion from P5.54 billion in April last year.

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