BIR urged to adopt ‘virtual stamp’ for cigarettes

A SENIOR legislator on Monday proposed that the Bureau of Internal Revenue (BIR) create “virtual stamps” for export cigarettes to deter their smuggling into the domestic market and to conform with international best practices.

At a hearing conducted by the House Committee on Ways and Means Monday, Representative Jose Ma. Clemente S. Salceda proposed a “less visible” form of security labelling, along with material labelling features.

“I’m asking the BIR to upscale and to come up with a virtual (stamp) para readable lang siya dito sa Pilipinas (which can be read only in the Philippines),” he told BIR officials at the hearing.

BIR Deputy Commissioner Arnel SD. Guballa replied, “We will discuss (the technical details) with our IT.”

Mr. Salceda also reiterated his call for the BIR to revoke Revenue Regulations No. 9-2015 which exempts cigarettes sold for export from tax stamp affixture and are instead given a unique identification code that is machine readable, adding that unstamped export cigarettes were a key source of supply for smugglers. Cigarettes for domestic sale affixed with tax stamps indicate that the manufacturer has paid the excise taxes due.

The House tax panel has found that tobacco smugglers evade excise taxes by declaring tobacco products “for export.”

The BIR added that current tax stamps affixed cigarettes for domestic sale have many security features which make it easy for the agency to spot fake stamps.

Mr. Guballa said while the BIR supports the proposal requiring the affixture of stamps on export cigarettes, he added that manufacturers expressed concerns that this could deter foreign markets since most other countries prefer the products to be shipped without stamps.

Ang demand ng abroad is walang stamps (The international market demand is for cigarettes to have no stamps),” he said.

The government loses P30 billion annually due to untaxed tobacco products on the domestic market. — Gillian M. Cortez