Business groups call for stricter monitoring of tobacco industry

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VARIOUS business groups in the country have urged the government to create a third-party watchdog that will be responsible for stricter monitoring of the tobacco industry.

The Federation of Philippine Industries, the American Chamber of Commerce, the Federation of Filipino-Chinese Chambers of Commerce and Industry, and the Japanese Chamber of Commerce and Industry in the Philippines voiced their concern and position in a letter submitted to Finance Secretary Cesar Purisima.

In the letter, the business associations raised concern over the ”alleged smuggling and tax evasion of some entities, with a lot of recent focus and attention surrounding the tobacco industry.”

The business groups stated that the issue not only places investor companies at a disadvantage when competitors do not pay the correct taxes, but it also deprives the government of much-needed funds for its many programs to alleviate the conditions of the poor.


They noted that an estimated P15 billion of taxes due are lost in the sale of illicit cigarettes alone.

The associations added that not paying the right taxes could also undermine the strength of the peso and the country’s current account surplus with the possible under-reporting of import data.

“Additionally, ensuring the proper implementation of our tax laws across all manufacturers is critical to the sustainability of a competitive industry, and to ensure security for the livelihoods of the more than 2.9 million individuals dependent on the tobacco sector,” they said.

With this, the business groups said it is calling for increased monitoring of manufacturing, importing, warehousing, and other facilities of all registered tobacco companies.

“Given the high demands on the public sector today, we humbly suggest that this could be achieved via a third-party monitoring group, working closely with the Department of Finance and its officers,” they concluded.

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6 Comments

  1. Benedict Cordero on

    “The business groups stated that the issue not only places investor companies at a disadvantage when competitors do not pay the correct taxes, but it also deprives the government of much-needed funds for its many programs to alleviate the conditions of the poor.”

    Very good point. Hopefully the government sees the wisdom in allowing third-party monitors.

  2. Dina Dela Cuesta on

    Hopefully the government is open to this idea of outside monitoring by a third-party. The illicit cigarette trade ballooned out of their control. It’s about time someone else steps in and attempts to put a stop to this.

  3. oliver vicente on

    “This issue is of such enormity because it not only places investor companies at a disadvantage when competitors do not pay the correct taxes, but it also deprives the government of much-needed funds for its many programs to alleviate the condition of the poor…,” – its not like they don’t already know this, they do. They just refuse to do something about it and its really quite frustrating.

    • Aries Cabaya on

      Perhaps a special treatment to these local manufacturer involved in shady deals of illicit cigarette trade points out to an estimated 15 billion foregone revenues. Hopefully DOF and the government consider the proposed third party group.

  4. Meredith Pacheco on

    Indeed this illicit cigarette trade has hurt the tobacco industry and the economy as a whole. Imagine what could have been done with that billions we lost in unpaid taxes? Our officials should really consider third-party monitoring, since obviously whatever the government is doing right now is nowhere near enough to properly monitor operations and implement sin tax collections.

    • Blake Rodriguez on

      That’s the thing. The country is poor enough as it is, we need every centavo we can get. The billions lost in this could have gone such a long way especially with helping the poor. Sadly, some people allow their greed to overshadow their compassion. Even sadder, some of our officials seem content just letting this slide.