₱240.64-M illicit cigarettes, production machines destroyed by BIR

CEBU CITY, Philippines — Illicit cigarettes, cigarette production machines, and other materials carrying an estimated ₱240.64 million in tax liabilities and penalties were destroyed by the Bureau of Internal Revenue (BIR) in Cebu on Thursday, August 13.

The destruction followed enforcement operations against illegal cigarette manufacturing, storage and distribution.

It capped a series of BIR Revenue Region No. 13 enforcement operations conducted from October 2024 to June 2025 against the illegal manufacture, storage and distribution of cigarettes in Cebu.

BIR-13 Regional Director Douglas A. Rufino said the cigarettes were locally manufactured in Cebu. Authorities traced the operations to different locations in the province.

Tax liability

According to the BIR, the seizures resulted in aggregate tax liabilities, including administrative penalties, amounting to ₱240,641,547.71.

Rufino said that the amount represented the tax consequences of the illicit cigarette products seized from a warehouse.

READ MORE: P1.7-B smuggled cigarettes seized at private port in Cebu

The enforcement operations resulted in the seizure of illicit cigarettes and counterfeit Internal Revenue stamps. Enforcers also seized cigarette-making machines, raw and packaging materials, and chemicals.

Rufino said that the seized cigarettes were manufactured locally. These were intended for distribution through local retailers without taxes being paid.

Cigarette-packing machines destroyed

He also noted that the illicit cigarettes were priced lower than what legitimate cigarette dealers sold.

“In comparison with the legit dealers of cigarettes, mababa halos yung presyong ito and they are not paying any taxes at all kung sakali mang ma-dispose ito through the local retailers,” Rufino said during a press conference.

Authorities also destroyed cigarette production equipment recovered during the operations.

Rufino said that three cigarette-packing machines were confiscated, including one or two larger machines and two smaller machines.

The equipment allowed the illicit manufacturers to produce cigarettes in larger quantities in a single day, he said.

Illicit cigarettes shredded

“Kaya napaparami ang production nila in a single day because of the aid of these machines. Para na rin silang yung ginagamit ng mga legit na mga manufacturer ng mga sigarilyo,” Rufino said.

(They increased daily production because of these machines, which were similar to what legitimate cigarette manufacturers used.

The machines were also cut into pieces during the destruction to prevent them from being used again.

The seized cigarette products were shredded, with Rufino saying every pack would be destroyed through the process.

Seven charged in court

Rufino said that seven individuals had been apprehended in connection with the local manufacturing operations.

Authorities arrested the seven during operations in different locations in Cebu beginning in 2024 and continuing into 2025.

According to Rufino, the manufacturing activities were traced to Daanbantayan, while a warehouse in Mandaue City was also used in the operations.

He said the seven individuals were employees of another person rather than the owners of the operation.

Possibly belonged to one syndicate

They have been charged in court for violations involving excise taxes and are currently out on bail, according to Rufino.

Rufino said that authorities believe the individuals may have been part of one group because they were apprehended in the same location.

However, he said authorities do not yet have proof that the operation was being run by a local or foreign syndicate.

“It’s very possible that this is being perpetuated by a syndicate, pero wala po tayong proof at this time na may sindikato nga dito either local or foreign,” Rufino said. (We have yet to find proof this is one syndicate, whether local or foreign.)

Campaign extends beyond Cebu

Department of Finance Secretary Frederick D. Go said that illicit cigarette operations are part of a broader problem involving products subject to excise taxes.

He identified tobacco, liquor, and fuel as among the common products subject to excise taxes that may be vulnerable to misdeclaration or non-declaration.

Go said that the issue is not limited to Cebu, and authorities are also working against illicit smuggling and trade in other parts of the country.

Bureau of Customs Deputy Commissioner Atty. Agaton T. Uvero said that the BOC has also been conducting operations against illicit tobacco, smuggled products, and vape products in Cebu, Manila and Mindanao.

Ending the cycle

Uvero said that the BOC’s operations are being conducted in coordination with other government agencies, including the BIR and National Bureau of Investigation.

Go said the destruction of confiscated products is intended to prevent seized materials from returning to circulation.

“Very often, we are able to confiscate materials. But I think the most important thing is that we would be able to destroy it once and for all. Because this is like a cycle, you have to end the cycle. When you confiscate, you arrest, you have to destroy to ensure it doesn’t find its way back into the system,” Go said.

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