House leader seeks ‘fair BIR probe’ of fake cigarette tax stamps

Deputy Speaker Mylene J. GarciaAlbano of Davao City 2nd District commended the Bureau of Internal Revenue (BIR) for initiating an industry-wide investigation on the massive proliferation of fake tax strip stamps on cigarette packs.

“It is the government’s duty to ensure impartiality in investigating all players in the [cigarette] industry. You cannot single out a local manufacturer just because some paid hacks are throwing baseless accusations. The proper way to do it is to investigate everybody,” the PDP Laban lawmaker said.

BIR Deputy Commissioner for Legal Services Jesus Clint Aranas disclosed last week that the agency will investigate cigarette industry players including market leader and multinational tobacco company, Philip Morris Fortune Tobacco Corp. (PMFTC)

“It is the government’s duty to ensure impartiality in investigating all players in the [cigarette] industry. You cannot single out a local manufacturer just because some paid hacks are throwing baseless accusations. The proper way to do it is to investigate everybody,” the ranking lawmaker said.

Excise tax collections last year fell 7.9 percent to R91.6 billion over the R99.5 billion collected in 2015. BIR Deputy Commissioner Nestor S. Valeroso attributed the decrease to the proliferation of fake tax stamps and smuggled cigarettes.

While Garcia-Albano commended the BIR for expanding its investigation, she said the agency also needed to ensure fairness in its probe.

She said it was crucial for the BIR to address the problem of fake tax stamps and smuggled cigarettes since revenue generation will be critical for the Duterte administration’s economic development program.

The Deputy Speaker said Congress, for its part, is doing its best to plug revenue leakages to make up for the projected revenue losses from the reduced personal income tax being pushed by the Duterte administration.

She said a higher excise tax on cigarettes was one of the measures approved by the House to shore up revenues without creating new taxes.

House Bill 4144, which was passed last December, seeks to reintroduce the two-tier tax system for cigarettes, which was replaced by a unitary tax at the start of this year. Aside from raising revenues, the bill also aims to address related issues such as the productivity and livelihood of local tobacco farmers and universal healthcare.

HB 4144, authored by Rep. Eugene de Vera of ABS Party-list, proposes a two-tier tax system where cigarette packs priced R11.50 below will be levied R32.00 and those priced R11.50 above will be levied R36.00 plus a five percent annual price increase thereafter.