SBMA cigarette maker padlocked for tax evasion

SUBIC BAY FREEPORT — The Subic Bay Metropolitan Authority (SBMA) closed down a cigarette manufacturer in this Freeport for tax evasion amidst a crackdown on companies here that fail to pay appropriate taxes and follow government regulations.

SBMA Chairman and Administrator Wilma T. Eisma identified the company as Qiu Tobacco Industrial Co. Ltd. Corp., which is engaged in the transhipment, packaging and repacking of tobacco products.

Eisma and Bureau of Internal Revenue (BIR) Region 3 Director Ed Tolentino led a joint SBMA-BIR team on Friday in inspecting the facilities of six cigarette manufacturers at the Gateway Park here to flush out those involved in the circulation of untaxed and fake cigarette products in the country.

During the inspection, it was found out that Qiu Tobacco, which produces cigarette brands like Belmont, Navy and D&B, did not have excise tax stamps on their soft packs.

A Chinese national who was caretaker at the facility said the cigarette brands were sold outside the country. But the joint SBMA-BIR team noted that the cigarettes had markings indicating they were intended for Philippine market.

Tolentino said this was a violation of Sec. 263 of the National Internal Revenue Code, which prohibits the possession or removal of articles subject to excise tax without payment of tax. Excise tax is a duty on manufactured goods which is levied at the moment of manufacture, rather than at sale.

The BIR official added that the lack of stamps meant the firm was not paying the proper tax for each pack that was manufactured and sold.
At the same time, the Qiu representative at the facility was not able to present a copy of the firm’s Certificate of Registration and Tax Exemption (CRTE). Eisma said this was a violation of an SBMA requirement to display the CRTE in company facilities.

A check with the SBMA Business and Investment Group indicated that Qiu Tobacco was issued a CRTE on December 5 last year. The permit was good until May 31, 20121.

Eisma said, however, that because of its failure to pay excise taxes, the company will be closed until further notice from the BIR.
The SBMA chief also reiterated that it was the agency’s mandate to ensure that all companies inside the Subic Bay Freeport Zone are paying their taxes properly.

She added that if a company complies with the law and the rules and regulations of the agency, the SBMA will protect that company. “If not, we will prosecute to the full extent of the law,” Eisma said.

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