Finance Secretary Carlos Dominguez III has directed the Bureaus of Internal Revenue (BIR) and of Customs (BOC) to dig deeper into the apparent smuggling into the country of machines used to manufacture counterfeit cigarettes.

Dominguez instructed officials of the BIR and BOC to trace the manufacturer of the machines and travel to the probable country or countries of origin to seek the cooperation of customs authorities there in finding the people behind the illegal entry of the cigarette-making units via Philippine ports.

He also thumbed down a proposal to negotiate with those behind the illegal importation, and ordered the BIR not to give up the machines. Dominguez said the BIR should determine instead the penalties that should be imposed on those responsible for such illegal importation.

“Look for the manufacturers, then file complaints before the concerned embassies there,” Dominguez told Commissioners Caesar Dulay of the BIR and Isidro Lapeña of the BOC during a Department of Finance (DOF) Executive Committee (Execom) meeting.

Dominguez issued these directives following the BIR’s report during that Execom meeting that cigarette-making machines confiscated recently in Cagayan de Oro City are now under the custody of the Bureau’s Strike Team and the Excise Large Taxpayers Field Operations Division.

“A meeting was held on July 19, 2018 to discuss the forfeiture proceedings to be institutionalized through a Revenue Memorandum Order. Appropriate action shall be taken towards dismantling and destroying these machineries and products,” the BIR said in its report to the Finance chief.

According to BIR Deputy Commissioner Arnel Guballa, the machines were being used to make cigarettes for export.

Dominguez noted that the machines had no import permits and the manufacturer who used them did not have a permit to operate, making the entire process illegal.

Last month, Dominguez told the BIR and BOC “to get to the bottom of the matter” following several operations conducted by members of the BIR Strike Team inside the San Simon Industrial Park in Pampanga where they seized three unlicensed cigarette filtermaking machines, boxes of filter rods, plug wraps and other materialsalong with fake cigarette products.

Two (2) factories in Cagayan de Oro, meanwhile, yielded four (4) unregistered cigarette making machines, six (6)packaging machines and a filter making machine during recent operations also conducted by the BIR strike team. Filter rods, tipping paper, cigarette paper, cut filters, inner liners pack and wrap film, plug wraps, acetate tow and other materials used to manufacture cigarettes were also seized during the raids.

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