Business and Economy
JTI chief vows to help gov’t stop cigarette smuggling
The head of JT International Philippines Inc. (JTI Philippines) is willing to share with the government information that will help address cigarette smuggling in the country. (Pixabay photo)
MANILA — The head of JT International Philippines Inc. (JTI Philippines) is willing to share with the government information that will help address cigarette smuggling in the country.
In a statement Wednesday, JTI Philippines General Manager Manos Koukourakis said the government lost billions in revenues annually because of rampant illicit cigarette trade nationwide.
Koukourakis said that “(sic)instead of raising taxes and going after the legit companies, why don’t we go after the smugglers?”
He vowed to work with authorities “and support their efforts with good intel.”
“This admin(instration) is sworn to go after smuggling and as part of the Legitimate Tobacco Industry, we will contribute to their efforts as much as we can,” he said.
“Either in Davao or wherever, the government will have a strong ally in its efforts against tobacco smuggling which is becoming rampant,” he stressed.
He said that for every PHP1 billion in gross revenues “the government makes PHP800 million in taxes, excise tax & VAT excluding corporate income taxes.”
“So in the end, the biggest beneficiary (in) clamping down smuggling is the government,” he said.
The Department of Finance (DOF) plans to support a measure calling for an increase in cigarette taxes, in a bid to raise additional revenue for the government and address smoking-related diseases.
The JTI Philippines chief said raising taxes on tobacco “will be disastrous for the legitimate tobacco industry”, which he said, lost around 40 billion cigarettes in just five years” or from 110 billion in 2013 to 70 billion last year.
“Another tax increase will lead to further consumer price increases which seriously risk turning the country into a Malaysia where cigarette smuggling is almost 60 percent of total consumption,” he added.
Meanwhile, Finance Secretary Carlos Dominguez III acknowledged Koukourakis’ offer of help.
“This information will be acted on by the BIR (Bureau of Internal Revenue) and the BOC(Bureau of Customs),” he said.
Yul Dorotheo
February 3, 2018 at 3:46 AM
As usual, JTI is trying to scare the government into not raising tobacco excise by linking it with smuggling, knowing full well that smuggling is a multifactorial issue and that corruption and poor enforcement (not taxes) are the main drivers of smuggling. Of course, the government should crack down on smuggling from a revenue and peace & order perspective, but from a public health perspective, tax increases are needed because cigarettes are still very cheap in our country. In reality, tobacco companies usually earn more after a tax increase, because they charge the consumer more than the amount of the tax increase.