Philippines: BIR to Monitor Cigarette Tax Stamp Implementation

Source from:  Manila Bulletin 03/24/2015

BIR to monitor cigarette tax stamp implementationThe Bureau of Internal Revenue (BIR) wants a strict monitoring of the implementation of cigarette tax stamps to ensure full compliance of tobacco manufacturers.

BIR Commissioner Kim S. Jacinto-Henares said the tax agency will have a monitoring team for the Internal Revenue Stamps Integrated System (IRSIS) after the March 1, 2015 deadline had lapsed.

"I think everyone is complying because nobody is complaining, I'm not getting any complain coming from the public, but I will tell our Large Taxpayers Service (LTS) to monitor its implementation," Jancinto-Henares said.

But the BIR chief said　that the agency saw a "significant increase" in excise tax collections during the first three-months of the year.
She attributed the increase in collections on the absence of "front-loading" in the last quarter of 2014.

Front-loading was a practice by cigarette manufacturers before IRSIS to avoid the full weight of the tax increase the following year.

"When we implement something, the presumption is everyone is following, we can't presume people are not following, that's why we need to monitor," Jacinto-Henares said.

"I'm not ready to say that before stamp tax some were cheating because that's an accusation that needs support," he added.

Earlier, the government started implementing IRSIS. Since December last year, all local cigarette manufacturers were required to affix numbered stamps on each pack of cigarettes and effective this month, all locally manufactured cigarettes in the market should have the stamps.

The BIR implemented IRSIS to capture the alleged "illicit cigarette trade in the local market."

Earlier, the BIR reported that excise tax collections from the so-called sin products hit P50.18 billion last year, exceeding the goal of P42.86 billion, but lower compared with P51.12 billion collected in the previous year.

In 2014, about P39.39 billion in additional taxes were collected from tobacco products, accounting for the bulk or 78.5 percent of the total. Last year's take from tobacco, however, was lower than P41.82 billion in 2013.

Alcohol products contributed P10.79 billion in additional taxes in 2014, higher than the P9.29 billion collected in 2013. Enditem