BIR raids 4 large-scale cigarette makers with P8b in tax liability

The Bureau of Internal Revenue (BIR) assessed P8 billion in tax liability from four large-scale manufacturers of illicit cigarettes in Clark Freeport, Pampanga, which it raided on Sept. 12, 2024.

The BIR said it initially computed the tax liability due to its discovery of illicit cigarettes and unregistered machines.

BIR Commissioner Romeo Lumagui Jr. said the raid is another win in the agency’s war against illicit trade. The operation is the largest illicit cigarette operation conducted by the BIR in terms of total tax liability since Lumagui became the head of the BIR.

“The BIR will continue to strengthen its efforts against illicit cigarette trade, wherever it is located,” Lumagui said.

“This P8-billion raid in Clark, Pampanga shows that the BIR targets even large-scale manufacturers of illicit cigarettes, not just small-scale dealers or smugglers. The BIR supports the call of President Bongbong Marcos to eradicate illicit tobacco trade. The BIR will do its share to protect the livelihood of legitimate tobacco farmers,” he said.

He said the BIR had consistently spearheaded skirmishes against illicit tobacco trade. Last month, the BIR conducted a night raid in Caloocan and Quezon City, uncovering illicit cigarettes with P838 million in tax liabilities.

The BIR also conducted a raid during the Philippine Vape Festival 2024 in August where thousands of vape products were seized.

The manufacturers of illicit cigarettes that were subject of the raid in Clark, Pampanga are now being investigated for violation of the National Internal Revenue Code (NIRC), Lumagui said.

These include violation of Section 263 or unlawful possession or removal of articles subject to excise tax without payment of the tax; Section 265-B or violations committed by manufacturers, importers, indentors and wholesalers of any apparatus or mechanical contrivance specially for the manufacture of articles subject to excise tax and importers, indentors, manufacturers or sellers of cigarette paper in bobbins, cigarette tipping paper or cigarette filter tips.

The BIR said other violations include those of Section 260 or unlawful possession of cigarette paper in bobbins or rolls, etc.; Section 255 or failure to file return, supply correct and accurate information, pay tax withhold and remit tax and refund excess taxes withheld on compensation; Section 254 or attempt to evade or defeat tax; Section 145-cigars and cigarettes; and Section 236 or registration requirements of the NIRC.