BIR to implement secured tax stamps for cigarettes

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The government might start affixing tax stamps on cigarettes by April next year to ensure tax compliance among tobacco companies.

Internal Revenue Commissioner Kim Henares disclosed this during a recent hearing conducted by the House Committee on Ways and Means chaired by Rep. Romero “Miro” Quimbo (2nd District, Marikina City) on the revenue targets and performance outputs of the BIR and the Bureau of Customs.

Asked by Rep. Rufus Rodriguez (2nd District, Cagayan de Oro City) on what else the BIR is doing to ensure that the right excise taxes are being collected by the government following the enactment of the Sin Tax Reform Law, Henares said the BIR would implement the use of secured tax stamps for cigarettes.

“Actually one of the measures to protect the revenue is the stamp or label that is going to be placed on the cigarette packs. Hopefully by April next year we would have implementation of the label on the cigarette,” said Henares.

She said the bidding for the tax stamp has already been completed and the BIR is now evaluating the bidder to determine whether it is qualified.

In a memorandum circular issued earlier this year, the BIR identified 26 major projects that will help the agency sustain a positive collection growth. Included in these projects is the implementation of the internal integrated system on the use of secured stamps for cigarettes to ensure tax compliance among tobacco manufacturers.

The BIR will tap a government-accredited printer to bid out the printing of the cigarette stamp, the BIR said.

In December 2010 during a hearing conducted by the Committee on Ways and Means then chaired by former Batangas Rep. Hermilando Mandanas, BIR Assistant commissioner James Roldan said the BIR decided to junk the unsolicited proposal of the Switzerland-based SICPA company and opted to instead adopt a system through public bidding.

Roldan told the committee that with the bidding process to be done under the general procurement law, all bid proposals will have to be assessed based on the terms and reference of the project scheme, which the BIR will formulate. He said there would be no more unsolicited proposals.

The SICPATRACE system proposed the application to tobacco products of tamper-proof strip stamps using a combination of data matrix code and fuse-on features, and the installation in the premises of tobacco manufacturers of scanning and activation software to monitor the number of tobacco products produced.

During the 14th Congress, the committee then chaired by former Antique Rep. Exequiel Javier, rejected the adoption of SICPA’s tax stamps unsolicited proposal because it was deemed as an attempt to raise revenues without the nod of Congress.

The panel also said the proposal cannot be done through a variation of the build-operate-transfer which will the ‘imprimatur’ of Congress, (PNA)


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