Alibaba acts to remove fake tobacco tax stamps

Alibaba says it has taken down listings for fake cigarette tax stamps from its e-commerce platforms after a tip-off from the Philippines government.

The Philippines' Department of Finance (DOF) issued the request to the Chinese online retailer's chairman Jack Ma last month, in a letter from Finance Secretary Carlos Dominguez III, which said: "advertising and selling of fake tax stamps in the open, through your company's web portal, provides so much room and easy access for individuals and entities to evade excise tax on cigarettes in the Philippines."

"This will make it much more difficult…to curb excise tax evasion, and cigarette and fake tax stamp smuggling to our country," he continued.

A letter sent back to the Finance Secretary from Jin Jianhang, president of the Alibaba Group, said that after an "extensive search taken by our security and platform governance teams, such listings have been taken down from both our Alibaba.com and AliExpress sites."

"We continue to screen our platforms for the items in question, and once found and their illicit status established, such items will continue to be removed in the future," continued Jin. "Regardless on which platform the transgression takes place, infringers face penalties, including permanent store closure."

The exchange of letters comes against a backdrop of escalating amounts of foregone tax revenues in the Philippines, which charges a flat excise duty rate of PHP 30 per cigarette pack. As of the start of 2015, all cigarette products produced in or imported into the Philippines have been required to have a tax stamp, but fake stamps are estimated to deprive the country's treasury of revenues in the region of PHP 10bn ($200m) a year.

The country's Bureau of Customs recently carried out raids that netted more than PHP 2bn ($40m) worth of cigarettes with poorly-produced fake stamps bearing the trademarks of local producer Mighty Corp.

The stamps lacked many of the authentication features found on genuine stamps produced by APO Production Unit, and the manufacturer was subsequently charged with evading tax payments to the tune of around $190m. Last month, the authorities ordered the arrest of the owner of Mighty Corp on charges of economic sabotage, according to local press reports.

In the wake of the Mighty Corp scandal Philippines President Rodrigo Duterte’s signed a directive to actively pursue individuals and entities evading taxes and duties, including excise taxes levied on cigarettes.