The Department of Justice (DOJ) and National Bureau of Investigation (NBI), in partnership with the Federation of Philippine Industries (FPI), have helped intensify the government’s intensified anti-smuggling campaign.
According to the FPI, an industry orientation was held to educate the DOJ and NBI on the profiles and data of selected industry associations to be aware of potential smuggling happening in every sector.
FPI Chairman Jesus Lim Arranza said that this public-private partnership (PPP) effort will cover analyzing of data to detect smuggling; its nature and scope; modus operandis; effects of smuggling; and the remedies or recommendations to eradicate smuggling in the country.
The federation cited a certain smuggling issue, involving a small-scale cigarette company that sells its products to retailers at P16 per pack—resulting in a mere P2.30 for the company to cover various cost when cut with the P12 excise taxes and 12-percent value added tax, which is obviously a case of smuggling. FPI said that the cigarette company now has a big market share of 18.7 percent, because of its low-priced products.
“It is impossible to manufacture low-priced cigarettes at that amount, especially for a small scale manufacturer with lower economies of scale. Hence, this unfair practice can undercut the competition thru low prices which is made possible through illicit trade practices,” the FPI said.
“There is possible underpayment of customs duties and taxes, under-valuation of raw materials, and diversion of raw materials imported under warehousing entries which were used for domestic production without payment of duties and taxes. If proven true, this practically creates an unlevel playing field; inimical to the stability of the country,” it added.
Because of these case, the FPI cited that the PPP of the three agencies will complement the present anti-smuggling campaigns of the government to help local manufacturers establish their businesses that would contribute to the development of the country’s economy.