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Salceda wants BIR to ramp up anti-illicit tobacco trade campaign; House tax chair says tax enforcement key to revenue recovery post-COVID

November 24th, 2021

House Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district) called on the Bureau of Internal Revenue (BIR) to expand its operations against illicit tobacco trade, after the Bureau reported a decline in the number of strike operations against suspected illicit tobacco purveyors, year-on-year.

“The BIR has been cooperative with the Committee in its fight against leakages in our tax collection system. But I am disappointed in the decline in operations against tobacco smuggling. Illicit trade will always be tempting due to high excise taxes. Enforcement is the only deterrent,” Salceda said.

Salceda adds that the Bureau’s efforts will be “crucial, as the next administration, whoever the next President may be, will be unlikely to impose new taxes given the employment situation.”

During a hearing by the tax panel on Monday, the BIR gave updates on the committee’s recommendations; revenue collection data; updated data on the volume of removals and excise tax collections for domestically produced and for domestic consumption, and raw materials and finished products with corresponding excise tax; the list of all registered cigarettes and tobacco brands; report on illicit cigarettes by STRIKE Team and cases filed; domestic sales data, and update on criminal complaint against GB BEM Cigarette Company, Inc. and Global Exprez Inc.

“To Commissioner Dulay’s credit, he has been extremely cooperative with the Committee. This is one of the closest relationships between the Congressional committee and the BIR in recent history. The BIR has granted our every recommendation, so far. We just need to work on enforcement,” Salceda said.

Tax committee to create working group on illicit trade

Salceda also says that he is mulling the creation of a technical working group or a subcommittee, to be chaired by Senior Vice Chair Estrellita Suansing, to oversee efforts against illicit tobacco trade and the abuse of customs bonded warehouses.

“I am considering creating a small investigative arm within the committee to focus on enforcement efforts.” Salceda said.

“The policymaking work of the committee has been fruitful. We have completed the entire Comprehensive Tax Reform Program and also initiated our own smaller packages. But enforcement is just as crucial as new taxes,” Salceda said.

“It will be extremely important after the pandemic, when employment is just recovering and government is reluctant to raise new taxes. Plugging the loopholes will be crucial in raising new revenues.”

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