Philippines: BIR Finalizes Terms for Tobacco Tax Stamp

Source from:  Business World  07/01/2013

THE BUREAU of Internal Revenue (BIR) has finalized the terms of reference (TOR) for the procurement of the technology for its security tax stamp project to aid in monitoring the supply and sale of tobacco products.

"We've [BIR] finalized our part of the TOR as of last Friday," Internal Revenue Commissioner Kim S. Jacinto-Henares said in a phone interview yesterday.

"We've passed it on to the APO [Production Unit, Inc.], which will add their part. Since they will manage the contract, they will be the ones to publish the terms of reference and conduct the bidding," Ms. Jacinto-Henares said.

The BIR, said the official, is in charge of the technology's security features while the APO will provide specifics on the printing of materials for the TOR. -

"Hopefully, we can finish the entire bidding process within the year and begin full implementation by early next year. Maybe by January or February, all tobacco products could already be equipped with the stamp," said Ms. Jacinto-Henares.

As a signatory to the World Health Organization's Framework Convention on Tobacco Control, the Philippines committed to adopt an industry-independent track-and-trace system to monitor the movement of tobacco products in the local market.

In January last year, the BIR said it would bid out a secure tobacco tax stamp scheme to help minimize smuggling of such products and plug revenue leaks. The target procurement date for the initiative was moved several times as the agency finalized the plans for the project's implementation.

Official tax stamps on products signify that all tax obligations of the manufacturer have been paid for.

"We'll be buying the stamp from the APO. The firms will then need to get the stamp from us," Ms. Jacinto-Henares explained.

In April, the BIR said it tapped the APO, a state-run printing services firm under the Presidential Communication Operation Office, to run the project in its stead, as security stamps are considered "accountable forms."

Under the government's procurement law (RA 9184), agencies requiring any printing of accountable forms must avail of the services of the Bangko Sentral ng Pilipinas, National Printing Office, or the APO.

Ms. Jacinto-Henares said that the APO will print the tax stamp. Security technology to ensure the stamp's authenticity will be bid out.

The implementation of a tax stamp scheme for alcohol products, added the BIR chief, will also happen "after the APO bids out the technology."

"That will just follow, as part of our ongoing efforts to supplement the 'sin' tax reform we put in place last year," said Ms. Jacinto-Henares.

President Benigno S.C. Aquino III signed the Sin Tax Reform Act of 2012 (RA 10351 ) into law last December.

The measure, which restructures the excise taxes on alcohol and tobacco products, took effect on Jan. 1.

This is expected to generate P33.96 billion in fresh revenues this year, the bulk of which, or P23.4 billion, would come from tobacco products, while the remaining P4.5 billion and P6.06 billion would come from fermented liquor and distilled spirits, respectively. Enditem