MANILA: The Bureau of Internal Revenue (BIR) expects to generate up to P15billion revenue from cigarette tax stamps to meet its P1.82 trillion target for the current fiscal year.
“We are estimating it at P10-P15 billion and, with proper enforcement, maybe we can increase the collection, especially when we have to meet the demands of the P1.8 trillion target,” BIR Deputy Commissioner Jesus Clint Aranas told reporters on the sidelines of the bureau’s tax campaign started in Manila.
BIR data showed that excise tax collections on tobacco products in 2016 declined by 8 percent from a year earlier, largely as a result of the graphic health warning and proliferation of fake stamps and cigarettes. Total excise collections on tobacco last year dropped to P91.6 billion from P99.5 billion in 2015.
The BIR said it was looking to tap a third-party to monitor the proliferation of fake stamps and cigarettes after the joint operatives of the Bureau of Customs-Intelligence and Investigation Service (BOC-CIIS) and the Philippine National Police (PNP) simultaneously raided warehouses of raw materials for cigarettes in Bulacan and Pangasinan. Criminal charges were also filed against the owners of an illicit depot in Davao, where P50 million worth of fake cigarettes were seized.
The raw materials were used for making fake cigarette products like Marvels, Mighty, La Reyna Mascada,
Marlboro, Philip Morris, Jackpot and Skag Fortune, which are originally produced by Philip Morris-Fortune Tobacco Corp. (PMFTC).
The proliferation of fake cigarettes as well as fake stamps led the BIR to issue letters of authority (LOA) to Tobacco Industries of the Philippines, Wongchuling Holdings Inc., La Campana Fabrica de Tabacos Inc., Mighty International and Mighty Corp.
The BIR also said it would issue LOAs to other tobacco players in the country as a way of expanding its investigation into the use of fake tax stamps.
The BIR uses LOAs to inform taxpayers that they will be subjected to an audit, their books of accounts, records and other transactions examined and verified.
“We are not only looking at Mighty. What we are looking at is the proliferation of fake stamps which affect all the manufacturers that is why I am planning to meet with them and for them to give their recommendations,” Dulay said.
It is a misinterpretation to say that the BIR is singling out Mighty, Dulay noted, saying the bureau is trying to look at the root and source of fake tax stamps.
“We will just finish the kick offs of our tax campaign and then cigarette firms should be expecting an invitation from BIR for dialogue on the fake stamps,” he said.