Illegal trade deprives the Philippine government of much needed tax revenue and cheats everyone: society, consumers, and legitimate businesses.
Cigarette smuggling is a complex problem, and not the victimless crime it is often perceived to be since it impacts a raft of industries, sectors, agencies and livelihoods – from agriculture, tobacco farmers, farm workers, retailers, consumers, tobacco-growing LGUs, and law enforcement units down to the revenue collection agencies.
Profits of legitimate businesses are compromised, public health goals are undermined, and taxes due the government to help the economy are gravely affected.
Without a steady flow of excise taxes from cigarettes, illicit trade also hampers the government’s ability to sustain funding for its various social welfare programs.
While there are no official figures, it is estimated that the government is losing between P30 billion to P60 billion annually in revenues from the illegal trade of cigarettes alone.
A study done by the University of Asia and the Pacific showed that illicit tobacco trade in the Philippines reached P17.9 billion in 2015 coming from only P2.6 billion in 2012.
The illegal trade challenge has adversely impacted legitimate tobacco businesses and is a hazard to both smokers and non-smokers alike as counterfeit products use substandard materials and are not subject to any quality controls which pose a risk to the public’s well-being. By avoiding the regulations that govern the legitimate tobacco trade, illegal tobacco also falls into the hands of young people much more easily thereby undermining public health objectives.
On a greater scale, income from the sale of illicit tobacco is often used to fund larger criminal activities of syndicates such as corruption, drugs and weapons smuggling, as well as human trafficking and terrorism.
JTI Philippines has been in constant coordination with local authorities and law enforcement in tackling the issue of illicit trade through training programs as well as initiatives that certify and monitor customers and suppliers which help secure our supply chain and prevent our products from being diverted from legal channels.
We ensure close collaboration with the Bureau of Customs, Bureau of Internal Revenue, and the Philippine National Police, among other entities, in stopping illicit trade from ensuing.
We are always looking for ways to deepen our partnership with trade-industry groups, chambers of commerce and business organizations in our efforts to help fight illicit trade. We are also continuously engaging policy makers and legislators to revisit and put teeth into existing laws with the aim of deterring illicit trade activities.
JTIP and our parent company have invested hundreds of millions of dollars and developed various initiatives to support the fight against illegal tobacco. We support law enforcement agencies all over the world through training programs that help police and customs officers differentiate genuine from fake cigarettes.
We are persistent in our efforts to combat those who push counterfeit tobacco products in the market. Our Anti-Illicit Trade team will continue to foster collaboration with the corresponding agencies and share our expertise and know-how to put an end to the rampant propaganda and criminal activities of the tobacco underworld. As everyone knows, the profits derived from such fraudulent activities fund other organized crimes, and even terrorism and human trafficking.