MANILA, Philippines – After being grilled during a legislative inquiry, officials of the Bureau of Internal Revenue (BIR) vowed to firm up the guidelines for the implementation of a tax stamp system covering alcohol products before the end of the year.
“We would be submitting a timeline for the implementation of the alcohol stamp requirement, maybe before the end of the year, we will issue the revenue regulation,” BIR Commissioner Caesar Dulay during a House Committee on Ways and Means hearing on Tuesday.
During the inquiry, ACT Teachers party-list Rep. Antonio Tinio and Batangas Rep. Lianda Bolilia questioned the failure of the BIR to include distilled spirits and fermented liquor in the Internal Revenue Stamps Integrated System to ensure that manufacturers and importers would pay the correct taxes on sin products.
Five years after the Sin Tax Law was enacted, the tax stamp system on tobacco products is still not in place, according to Tinio.
“This is a requirement of the sin tax law, that both tobacco and alcohol products should have tax stamps. Why is it that five year after the law was passed, it has yet to be fully implemented,” Tinio said.
Dulay replied that in the absence of the tax stamp on alcohol products, revenue officers are monitoring manufacturing plants to get an inventory of the taxes that they need to pay.
Tinio retorted, “In other word, we just rely on good faith. Of course, we would like to do that, but the law itself says there is a requirement for the tax stamp.”
“What we are seeing here is a whole industry being exempted from this requirement. Napakahigpit na sa tobacco, pero may tax stamp na pinepeke pa, eh ito (alcohol) walang stamp. Malaking iskandalo ito,” Tinio added.
[We have been very strict in tobacco products but there are tax stamps that are still being falsified, and this one on alcohol products, there are not stamps. This is a big scandal.]
Also, during the House panel’s inquiry, BIR officials reiterated its plan to roll out new tax stamps for tobacco products with a new design and with better security features, which could increase the price of cigarette by 15 centavos per pack.
BIR assistant commissioner Teresita Angeles said the new cigarette tax stamps would be out by October.
Department of Finance Secretary Carlos Dominguez III earlier said that eight of the 10 security features of the current tax stamps had been copied by counterfeiters.
The government is currently investigating Mighty Corporation over millions of cigarette packs that are allegedly bearing counterfeit stamps that deprive the government of huge revenue.
Dominguez said that aside from the new design, CCTV monitoring system would also be installed inside the cigarette factories and warehouses so that BIR personnel could monitor their operations.
Surigao del Sur Rep. Prospero Pichay suggested another system.
“There are digital stamping machines, which you can connect on a main frame and detect how much cigarette is manufactured each day, perhaps we should explore this,” he said.