Sin tax measure won't stop smuggling, says lawmaker

MANILA, Philippines - The principal author of the Malacañang-backed “sin tax” bill said yesterday that smuggling of cigarettes will not be completely eradicated even if the proposed proposed unitary tax system for tobacco and liquor products would be fully implemented.

Cavite Rep. Joseph Emilio Abaya, chairman of the House appropriations committee, said the smuggling of counterfeit and low priced cigarette and liquor should be addressed by the Bureau of Customs (BOC) and should not deter efforts to reform the tax system.

“Clearly, it is not zero smuggling and if you get this tax reform in, there will be still be smuggling. It will happen but I think it is better addressed by the BOC,” Abaya told the reporters in a news briefing called by administration solons supporting House Bill 5727.

The lawmaker was responding to queries on the possible impact of HB 5727 on smuggling activities.

A small player in the tobacco industry warned last week the rampant smuggling of cigarettes in the country, particularly in the South, won’t stop even of the government implements a unitary tax rate on tobacco and alcohol products.

Blake Clinton Dy, vice president of the Associated Anglo-American Tobacco Corp., refuted the statement of Finance Secretary Cesar Purisima during last week’s hearing of the House committee on ways and means on the proposed unitary “sin tax bill” that the enactment of the measure into law will stop smuggling.

Dy showed lawmakers samples of smuggled cigarettes to the attending congressmen to support his statement that a unitary tax system on tobacco products will result to a rise in smuggling incidence.

He said smuggled cigarettes are now widely sold in Sulu, Zamboanga and Tawi-Tawi. The cigarettes are produced in Indonesia, Thailand and Vietnam.

“These cigarettes have not paid any duties and do not contain the health warnings required under the law. The smugglers managed to introduce these cigarettes into the country by using small boats to cross the gap between the porous border of the Philippines and other islands in Asia,” he said.