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Being located in the zone allows them to import raw materials tax-free and exempts them from Filipino tobacco and excise duties

In 1970 the state's greatest sources of lost cigarette sales were to other states[62] and to cigarettes "lost in transit, hijacking and thefts."[63] At a 1970 NTTA meeting, Michigan reported 19 cigarette tax violations for the year: 10 for possessing, five for transporting, three for selling, and one "other."[64] At a 1976 NTTA meeting, an analyst concluded that Indiana's per-capita cigarette consumption "confirm[ed] that bootlegging [was] in proportion not only to actual tax rates but also to tax disparity

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