Tobacco smugglers in the Philippines have taken advantage of the pandemic to bring their cheap, substandard products to consumers suffering from reduced incomes, cigarette maker Winston said.
In a statement, John Freda, managing director of Japan Tobacco International (JTI) in the Philippines, said smuggling unions are not slacking off despite consecutive successful raids by law enforcement on warehouses, factories, trucks. container ships and residential houses.
Citing intelligence data from JTI, the global tobacco company said illegal cigarettes from Vietnam, Cambodia and other countries are reaching the Philippines with “ever increasing frequency.”
Freda said the minimum cash fine of 50 million pesos and the possible jail term of eight to 12 years, according to Republic Laws 11346 and 11467 of the National Internal Revenue Code, also did not deter illicit traders to exercise their profession.
“Illegal tobacco companies are directly robbing the state. As legitimate businesses, we are a very efficient tax collector, and it is clear that we cannot do that if there is an illegal problem. Illegal trade fools everyone: governments, consumers, farmers and legitimate businesses, ”he said.
Freda said he understands that for a country with so many islands like the Philippines it’s a huge challenge to control the problem, but thinks the deterrents need to be stronger.
“Tougher penalties are needed – we need to see people arrested and brought to justice in a way that deters others from being part of this criminal enterprise,” said Freda.
The illegal tobacco trade is a treat for criminals who make huge profits, often with very low risk of being caught and insignificant penalties, Freda said.
“A lucrative business indeed for anyone who has the logistics in place and can copy our products and import without paying taxes, which is unacceptable,” he added.
According to JTI, the ASEAN, or Association of Southeast Asian Nations, counterfeit goods market is worth more than $ 35.9 billion, with $ 3.3 billion in tax revenue lost each year. because of contraband cigarettes.
In a recent webinar against the illicit trade, Ian Monteith, senior global director of JTI, said tobacco smugglers are benefiting from rising unemployment and reduced disposable income.
“So COVID hasn’t stopped criminals from taking advantage of it. On the contrary, the pandemic has put pressure on the purchasing power of consumers and pushed them to turn to illegal products, ”said Monteith.
Monteith revealed that organized criminals are highly adaptable, creative, exploiting public anxiety, and enriching themselves not only on tobacco, but other products such as personal protective equipment (PPE) and alcohol.
Even counterfeit COVID vaccines have been identified in Asia, he noted.
Citing a JTI report, Monteith said that across 30 European countries, 34.2 billion cigarettes smoked last year were illegal, representing 7.8% of total cigarette consumption in the region.
JTI estimated that tax losses for European countries reached 8.5 billion euros per year, or nearly 500 billion pesos.
He pointed out that France is the European country with the highest incidence of illicit trade in cigarettes – 32% at the end of 2020 while South Africa shows its “ban” regulations against cigarettes. did not work.
“Some consumers believe that illegal tobacco is a victimless crime. We need to educate them about the wider social impact of buying illegal goods. An important action is to educate consumers that with every illegal package they buy, they are supporting criminal groups, ”said Monteith.
“Many of these groups also traffic people and arms, with far-reaching consequences for society,” he added.
Additionally, Monteith said the illegal trade impacts everyone, including farmers, millions of retailers and hundreds of thousands of consumer suppliers.
“The loss of income for law-abiding people is significant, as is the impact on consumers attracted to purchasing substandard products,” said the JTI official.
The World Bank has denounced the increasing trend in the global illegal tobacco trade, noting that the trade is estimated at 40 to 50 billion dollars per year.
The International Chamber of Commerce, which also attended the webinar, predicts that the global counterfeit trade, including tobacco, will reach $ 4 trillion by 2022, mainly through e-commerce.
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