BIR team raids Valenzuela grocery for selling smuggled, fake cigarettes
BIR operatives inspect smuggled and fake cigarettes from a grocery they raided in Marulas, Valenzuela City last Wednesday, July 26, 2023. (Photo from the Bureau of Internal Revenue)
MANILA, Philippines — A (BIR) raiding team seized P400,000 worth of smuggled and fake cigarettes from La Cruz General Merchandise, a big grocery, in Marulas, Valenzuela City last Wednesday.
The seized items consisted of 298 cartons of assorted brands of smuggled and fake cigarettes — Dunston Blue, Septwolves Black, Septwolves Red, Richman Royale Blue, and Richman Royale Red. Some of the cigarettes were already expired, according to a BIR statement.
The owner of the grocery reportedly told the raiding team that illicit goods came from Divisoria in Manila. The identity of the grocery owner was withheld by authorities pending further interrogation,
The BIR raiding team was led by the Regional Investigation supervisor, Rozen Novilla, and supervised by Revenue District Officer Estrella Manalo and Assistant Revenue District Officer Florita Morales.
As the BIR defines the terms, fake or counterfeit cigarettes are the imitated version of legal brands and smuggled cigarettes are illegally sneaked into the Philippines from the neighboring countries.
Article continues after this advertisementBoth fake and smuggled cigarettes pay no excise and value-added taxes (VAT) to the government, defrauding the BIR of P50 billion to P100 billion every year, according to BIR Commissioner Romeo Lumagui Jr.
Article continues after this advertisementThese funds are intended to finance basic services like the Universal Health Care program, infrastructure development, and social services.
Nationwide inspection
Lumagui led a second nationwide simultaneous inspection this month of retail and wholesale stores and warehouses suspected of trading in untaxed and illicit products.
He canceled the permits to operate of two companies in Subic Bay Freeport for making cigarettes without a BIR registration.
Lumagui warned that the BIR would continue to raid stores selling fake and smuggled cigarettes not only in Metro Manila but nationwide.
“We have lined up more trade enforcement activities and only waiting for the final details of each case before we finally proceed with the raid,” he said.
Owners of raided stores face offenses for collection of taxes, including surcharges and penalties for all the violations of the Tax Code including, but not limited to Sec. 145 on violation on the Floor or Minimum Prices, Sec. 254 on Attempt to Evade or Defeat Tax, Sec. 258 on Unlawful Possession or Removal of Articles Subject to Excise Tax Without Payment of the Tax, Sec. 264 on Failure to Issue Receipts, Sec. 265 on Offenses relating to tax stamps.
The following are the penalties for violating those sections:
- Sec. 145: a fine of not less than 10 times the amount of the excise tax and the VAT due but not less than P200,000 but not more than P500,000
- Sec. 254: a fine of not less than P500,000 but not more than P10,000,000 and imprisonment of not less than six years but not more than 10 years
- Sec. 258: a fine of not less than P30,000 but not more than P50,000 and imprisonment of not less than two years but not more than four years
- Sec. 263: a fine of not more than 10 times the amount of excise tax due on the articles found but not less than P1,000,000 and imprisonment of not less than five years but not more than eight years
- Sec. 264: a fine of not less than P1,000 but not more than P50,000 and imprisonment of not less than two years but not more than four years
- Sec. 265: a fine of not less than P10,000,000 but not more than P500,000,000 and imprisonment of not less than five years but not more than eight years
