Tobacco smuggling on the rise: Customs seizes P1.8 billion worth

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In a recent report, the Bureau of Customs (BoC) revealed an increase in the confiscation of cigarettes and tobacco products, with totals for the year already exceeding those of the previous one. The value of seized items reached P1.8 billion (US$32 million) by end-July, outpacing the 2022 haul of P1.1 billion (US$19 million), signifying a 67.3% rise despite only being halfway through the current year.

“The accomplishments of 2022 were accumulated for a series of seizures. For this year, the number of seizures has already exceeded, at the same time, the number of seizures already exceeded last year,” said Director of the Customs Intelligence and Investigation Service, Verne Yadan Enciso.

These details emerged during the second session of the International Tobacco Agricultural Summit where Sen. Cynthia Villar announced plans to include tobacco in the ‘Anti-Agricultural Smuggling Act’ under Republic Act 10845. The senator, who also heads the Senate Committee on Agriculture, Food, and Agrarian Reform, attributed the loss of an estimated P3 billion (US$53.7 million) in excise taxes from 2019 to 2022 to illicit cigarette operations. Villar explained that by including tobacco, the illicit trade which has significantly reduced prices and demand for local tobacco should decrease. Ultimately, this would minimise the related income losses for tobacco farmers.

With this alteration, the senator shared that the act will be renamed to ‘Anti-Agricultural Economic Sabotage Act of 2023’. This inclusion is seen positively by Giovanni Palabay, Officer in Charge and Deputy Administrator for operations at the National Tobacco Administration, reported by The Manila Times.

“It’s good that they included tobacco as it is a high-value crop, if they include that, the tendency is that it will minimize smuggling and, of course, smugglers will be prevented from conducting illicit trade,” Palabay noted. This move should minimise revenue loss from P30 billion (US$537 million) to P15 billion (US$269 million), potentially even P5 billion (US$89 million), assuming proper implementation.