Lawmakers close hearings on cigarette tax stamp issue

MANILA, Philippines - The Bureau of Internal Revenue’s plan to provide security stamps on cigarette packs faced another setback as lawmakers yesterday shelved discussions on the controversial tax stamp system on cigarette packaging proposed by Switzerland-based Sicpa Product Security SA (SICPA).

Members of the House committee on ways and means led by Rep. Exequiel Javier (Lone District, Antique) said the project would only mean additional costs to consumers.

As such, the panel approved the motion of Rep. Victor Ortega (1st District, La Union) to close the hearings. The committee also asked the Inter-Agency Investment Coordination Committee  (IICC) and the National Economic Development Authority (NEDA), the ICC’s secretariat to provide the panel with a report on their decisions allowing the BIR to pursue negotiations with Sicpa.

NEDA earlier gave the BIR the green light to pursue negotiations with SICPA after it reviewed the Swiss company’s proposal. The BIR had submitted the proposal to NEDA for review.

The SICPA proposal will involve the application to tobacco products of tamper-proof strip stamps using a combination of data matrix code and fuse-on features; and installation in the premises of tobacco manufacturers of scanning and activation software to monitor the number of tobacco products produced.

Rep. Rufus Rodriguez (2nd District, Cagayan de Oro City) is questioning the BIR why it wants to pursue the project when it would heavily burden consumers.

“What’s the basis for approving the project to go on? Why is this project being rushed when the amount of P20 billion would be passed on to consumers?” Rodriguez said.

A total of P20.114 billion in cost will be passed on to consumers, according to the BIR. 

Rep. Edcel Lagman (1st District, Albay), for his part, said that the SICPA proposal needs to pass a congressional challenge because of the many issues being raised against it.

“Was the Build-Operate-Transfer Law violated when SICPA was named the original proponent? Are we here to say that SICPA’s offer was onerous? Will it pose additional burden to the people? SICPA and the BIR are fasttracking their negotiations which could render our findings moot and academic,” Lagman said.

On the other hand, Hans Schwab, SICPA director, assured committee members that the Sicpatrace proposed system has several levels of security which no one can copy or duplicate and would therefore meet the needs of the BIR.

The BIR wants to adopt a security system on cigarettes to address rampant smuggling in the country.