THE DEPARTMENT of Finance (DoF) said it will hold further discussions with Chinese customs officials about shipments of cigarette-making machines to the Philippines, which must be registered but are often used in the illicit production of cigarette products that evade tax.
The discussions follow confirmation from the Bureau of Customs (BoC) that it has received a preliminary report from China on such shipments.
“We are going to talk to their Customs about a number of issues and one of them is going to be these cigarette making machines. We are not certain that all of them come from China but our best guess is that majority of them come from China,” Finance Secretary Carlos G. Dominguez III told reporters in a briefing last week.
These unregistered cigarette-making machines are usually used to make cigarette products to evade taxation.
“I think they submitted their initial report already,” the BoC Assistant Commissioner of the Post Clearance Audit Group Vincent Philip C. Maronilla told the BusinessWorld on Monday.
In early July, the BoC said when its Chinese counterparts have agreed to “look into the matter” of cigarette-making machine exports to the Philippines.
“We’re trying to get into the gist of this illegal cigarette-making syndicate because we noticed that it’s not only in Luzon, but they’re operating in other areas,” Mr. Maronilla added.
In earlier statements, DoF said the increase in the tobacco excise tax has led traders to resort to smuggling such machinery.
Meanwhile, Undersecretary Mark Dennis Y.C. Joven said at the same briefing that the DoF is scheduled to sign five agreements, two of which will involve BoC. The BoC’s agreements concern cooperation with China Customs and X-ray equipment donations from the Chinese government.
The “cooperation on trade” between the two agencies is expected to address concerns regarding substandard products and invoicing, Maronilla said.
He also said that BoC is finalizing a bilateral agreement between the two agencies for possible joint operations, setting up parameters and common policies to “avoid entry of illicit goods.”
“The third is a Framework agreement between DoF and CIDCA (China International Development Cooperation Agency) which spells out the process wherein we can take out reminbi loans from China. Fourth is the segment of the PNR South Long-Haul line regarding the hiring of a project management consultant and the fifth one involves phytosanitary inspections,” Mr. Joven added. — Beatrice M. Laforga