Philippines: BIR Finally Issues Circular on Cigarette Tax Stamp System

Source from:  ABS-CBNnews.com 09/15/2014

The Bureau of Internal Revenue (BIR) has finally released its circular for the implementation of a cigarette tax stamp system on cigarettes in efforts to curb the trade of illicit tobacco products.

BIR issued revenue memorandum circular no. 72 dated September 5, 2014, which imposes the use of the Internal Revenue Stamp Integrated System (IRSIS) for the ordering, distribution, affixture and monitoring of tax stamps on imported and locally manufactured cigarettes.

The BIR said in the circular, which is effective immediately, that not later than October 1, 2014, all locally manufactured packs of cigarettes "shall be affixed with the internal revenue stamps."

"With respect to imported cigarettes, no importation and subsequent release of cigarettes from the customs warehouse shall be allowed unless the new stamps shall have been affixed thereto effective January 1, 2015," the BIR added.

The BIR also said that effective February 1, 2015, all cigarettes manufactured in the Philippines and imported into the country shall be affixed with the new internal revenue stamps.

"All concerned importers and local manufacturers of cigarettes shall have been enrolled with IRSIS and the necessary briefings/trainings shall have been conducted to all concerned taxpayers and BIR personnel," the BIR said.

BIR Commissioner Kim Henares, however, is still waiting for Finance Secretary Cesar Purisima to sign the implementing rules of regulations for the tax system.

She said that due to the lack of signature from Purisima, the BIR was forced to postpone the mandatory implementation of tax stamps to October 1 instead of September 1.

She noted, however, that tobacco companies may begin putting the tax stamps on cigarette packs even without the IRR.

"They [cigarette companies] can use the tax stamps as early as this month even without its IRR. But come October, the implementation will become mandatory to all industry players," she said.

Philip Morris Fortune Tobacco Corp. (PMFTC) Inc. and Winston cigarette-maker Japan Tobacco International (JTI) have already pre-ordered the new stamps while Bulacan-based Mighty Corp. is still waiting for the release of the IRR.

The IRSIS is a web-based application that monitors production and tracking distribution of cigarette products nationwide.

According to the recently released Asia-14 Illicit Tobacco Indicator 2013 study, the Philippines is the fastest growing and one of the top illicit cigarette markets among ASEAN nations. Enditem