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Government Revenue Down P25 Billion Due to Illegal Cigarette Market

According to the Bureau of Internal income (BIR), the illegal cigarette trade cost the Philippine government P25.5 billion in income in 2023 and P6.6 billion as of April of this year.

Venus Gaticales, head of the BIR’s excise big taxpayers field operations section, pointed out that illicit trade activities were the main reason for the P25.5 billion, or 15.9 percent, decline in excise tax income in 2023.

In comparison to the same period last year, the BIR saw P6.6 billion in revenue losses from January to April of this year.

“As an archipelagic country with many open borders, there is a need for the government to strengthen border control and implement efficient tax administration,” Gaticales said, highlighting the difficulties presented by the Philippines’ geographic location.

She emphasized that the BIR’s limited staff and lack of control over border security are its main problems. “We conduct enforcement activities only when the illicit products are already within the Philippines,” she stated.

Gaticales stated that the sale of fake goods was one of the many illegal trade activities that contributed to the revenue losses. She also pointed out that there has been a shift toward vaping or electric cigarettes, particularly among young people, which has further reduced tax receipts.

“Most vape products are imported, making it difficult to determine the extent of smuggling. Our enforcement efforts focus on products that are already within the country,” said Gaticales.

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