By APD writer Melo M. Acuna

MANILA, Dec. 10 (APD) -- Philippines Finance Secretary Carlos G. Dominguez III directed the Bureaus of Customs (BOC) and Internal Revenue (BIR) to coordinate with their counterparts in China to stop the illegal entry of cigarette-making machines used to manufacture counterfeit tobacco products in the Philippines.

He issued the order after meeting with Internal Revenue Commissioner Caesar Dulay that the illegal tobacco trade shifted from smuggling cigarettes to the production of counterfeit brands using undocumented cigarette-making machines bought from China.

“What we have to stop is the import of the equipment, which is coming from China,” Dominguez said during a recent Department of Finance (DOF) Executive Committee (ExeCom) meeting.

He instructed Dulay and Customs Commissioner Rey Leonardo Guerrero during the ExeCom meeting to coordinate with Chinese officials to inform them about this illicit scheme and to request them not to allow the export of cigarette-making machies from China to the Philippines without proper documentation.

According to previous raids by the Bureau of Internal Revenue, counterfeiters are able to manufacture fake versions of popular brands using smaller and more portable versions of machines and devices for making cigarettes.

“They have graduated from fake stamps to fake cigarettes,” Dulay said during the meeting.

Raids were conducted in Luzon and Mindanao where unlicensed cigarette-making machines, packing machines and filter-making machines were seized along with fake cigarettes and fake tax stamps.

Dominguez ordered the BIR to dismantle the confiscated machines and be rendered non-operational.

However, the DOF did not identify the personalities responsible for the illicit cigarette production or whether appropriate charges have been filed in court.

A joint task force composed of BIR and BOC personnel to crack down hard on people involved in smuggled and counterfeit cigarettes.

Earlier operations led to the closure of local manufacturer Mighty Corporation last year. It sold its assets to settle its tax obligations after the government slapped a series of criminal complaints against Mighty Corporation’s officials.

It will be recalled the settlement reached P 30.4 billion in total revenues from deficiency and transaction taxes from the sale of its assets.

According to the Department of Finance statement, Japan Tobacco International (JTI) took over and excise tax collections from tobacco products increased by an average of P 2.5 billion a month.

(ASIA PACIFIC DAILY)