BIR not filing charges until fake stamp probe completed

The Bureau of Internal Revenue (BIR) said yesterday it will not take criminal or civil action against any cigarette manufacturer suspected of using fake stamps on their products unless it completes its audit of all other producers and importers.

BIR Deputy Commissioner for Legal Service Jesus Clint Aranas issued clarificatory statements to deny news reports that the bureau is readying tax dodging case against local manufacturer Mighty Corporation (MC) following seizure of suspected untaxed cigarette brands in Mandaue City.

The seized contraband included brands produced not only by MC but its competitor Philip Morris Fortune Tobacco Corporation (PMFTC) as well as imported varieties. Aranas said everybody in the industry has to be investigated to preclude charges of favoritism and bias.

He stressed that charges must be backed up with solid and direct evidence to stand a court trial, adding it is unwise to take side in the on-going trade war between PMFTC and MC.

Aranas said BIR Commissioner Caesar R. Dulay has already scheduled a dialogue with cigarette manufacturers to establish and determine the sources of untaxed cigarettes whether they are produced locally or smuggled into the country. He described the meeting as crucial because the government is losing huge amount of excise and income taxes from the racket. Aranas also denied news reports that the sources of fake tax stamps pasted on cigarette packs have already been identified.

He said it is still premature and unfair to file cases at this time. A tax fraud official who declined to be named agreed with Aranas' observation, saying "the allegations are still hearsay." It’s on record that MC has been the object of bullying and demolition by its multinational rivals, subjecting it to prejudgment of guilt at every opportunity, after it ate up a large chunk of their monopolized market following the implementation of the sin tax reformed law in 2013.