Philip Morris Fortune Tobacco Asks Gov''t to Adopt Tax Stamp Scheme

Source from:  InterAksyon.com 08/01/2014

The country's dominant tobacco company today asked the government to push through with the enforcement of new tax stamps so it can boost revenue.

In a statement, Philip Morris Fortune Tobacco Corp Inc (PMFTC) said it welcomes the government's success in more than doubling tax collections from tobacco products after the passage of the Sin Tax Reform Law.

"However we contend that there are opportunities for billions of peso in additional revenue if evasion practices are stamped out and tax administration tightened. We are hopeful that strict enforcement of the new tax stamps will achieve that end," PMFTC said.

Philip Morris International said the share of taxed cigarettes in the Philippines has gone down by 13.4 percent in the second quarter because of the proliferation of untaxed tobacco products allegedly made by local manufacturer Mighty Corp.

"In the Philippines, total estimated tax-paid industry cigarette volumes decreased by 13.4 percent to 20.1 billion units, primarily reflecting a lower declaration of volume for excise tax purposes by PMI's principal local competitor," Philip Morris chief financial officer Jacek Olczak said.

"The drop in tax-paid industry volume reflects the fact that Mighty Corporation's tax-paid volume was down by around 40 percent. In contrast, we estimate that its total sales volume, both tax-paid and non-tax-paid, increased by about 20 percent," he added.

PMFTC said it stood by a September 2013 report done by the International Tax and Investment Center and Oxford Economics that showed an increase in the trade of illicit tobacco or untaxed cigarettes.

This as the non-government Southeast Asia Tobacco Control Alliance (SEATCA) scored the report for using a flawed methodology and coming up with skewed findings that support the tobacco industry.

"SEATCA knows well that in dozens of countries around the world, there exists meaningful and transparent cooperation between governments and tobacco manufacturers in order to address the illegal cigarette trade," PMFTC said.

"The legitimate tobacco industry in the Philippines is responsible for the livelihoods of millions and in 2013 contributed 70 billion in taxes. SEATCA's stated goal to exclude legal manufacturers in resolving this growing problem is both irrational and self-defeating," it added. Enditem