BIR seeks reversal
of DOJ’s stamp tax ruling
The Bureau of Internal Revenue (BIR) is seeking an immediate reversal of the justice department ruling stopping the agency from entering into a product security contract aimed at curbing smuggling of cigarettes so that it could sit down with other proponents.
BIR Commissioner Kim Jacinto-Henares said unfavorable ruling practically removed the agency’s power to adopt measures aimed at raising revenues and curbing smuggling.
She said BIR is open to discussing the merits of a proposal from Philip Morris proposal which boasts of a much cheaper and efficient track and trace technology.
The BIR is on prowl for a new technology provider after the government dumped the unsolicited proposal of Swiss product security firm SICPA Product Security SA for being costly and not suited to the needs of the government.
"But we need to clear certain legal issues first," she said.
"We will listen to them (Philip Morris) once the legal wrinkle is resolved," Henares added.
She said the assertion that BIR does not have the power to enter into agreements for purposes of curbing technical smuggling "puts at risk our capacity to impose fees and charges."
Excise tax collection from sin products such as cigarettes was generally up in the first six months of the year, posting a 9.6 percent climb to P32.284 billion from P29.446 billion in the same period last year.
But still revenue leakage arising from technical smuggling of cigarettes and alcohol is estimated to be between P10 billion to P30 billion yearly.
Tobacco maker Philip Morris earlier announced its readiness to offer government a cheaper technology that would curb smuggling, using a numeric bar-code system, which costs only less than 10 centavos against the 62 centavos per pack offer of SICPA.
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