The Philippines should go after smugglers rather than raise taxes on cigarettes, Japan Tobacco said yesterday as the Duterte government prepared its second tranche of tax reforms, ABS-CBN News has reported.
The president of Japan Tobacco International Philippines, Manos Koukourakis, said he had seen for himself how sellers of smuggled cigarettes were “ubiquitous” at a Davao public market.
‘Instead of raising taxes and going after the very legit companies like JTI Philippines… why don’t we better go after the SMUGGLERS!!!’ Koukourakis reportedly said in a text message to ABS-CBN News.
‘It will be good for the government, far better for those … [who] choose to smoke and not against the legitimate industry.’
Japan Tobacco recently acquired the Filipino manufacturer of cheap cigarettes, Mighty Corp, which had settled a tax evasion case with the government for P25 billion.
The first tranche of tax reform that took effect on January 1 included higher duties on cigarettes, fuel, sugar-sweetened drinks and cars to offset a reduction in personal income tax rates and help fund the President’s P8 trillion infrastructure program.
Under a 2012 law that restructured levies on tobacco products and spirits, the current P30 tax per pack was to be increased annually by four percent from January 1, 2018.
The government will not submit its own proposal on tobacco excise taxes in respect of the second package of reforms, but will instead ‘support’ a bill filed by Senator Manny Pacquiao, according to a Department of Finance statement.
Pacquiao is seeking a unitary cigarette excise tax of P60 this year, and a mandatory nine percent annual increase.
‘Go after the SMUGGLERS’
