Lawmaker asks Teves to junk tax stamp proposal

MANILA, Philippines - The chairman of the powerful House ways and means committee has advised Finance Secretary Margarito Teves to totally shelve the tax stamp proposal after two government agencies already doubted its viability.

Antique Rep. Exequiel Javier, committee chairman, said the revelations made by the National Economic and Development Authority (NEDA) and the National Tax Research Center (NTRC) “are clear writings on the wall.”

NEDA had already expressed doubts to the claims of SICPA Product Security SA, which is the proponent of the tax stamp scheme, that the government would be able to collect a total of P115 billion in seven years by using its tamper-proof strip stamps.

For its part, the NTRC said SICPA’s assertion still needs to be validated because it is “largely based on its assumption that 251 million packs of cigarettes are imported annually while the Bureau of Internal Revenue’s (BIR) reported volume is only 13 million to 15 million packs a year.”

Javier said he is puzzled why Teves and the Bureau of Internal Revenue (BIR) are still pushing for its implementation despite the findings of NEDA and NTRC as well as that of the House committee on ways and means.

The committee recommended in its report that the BIR stop its ongoing negotiations with SICPA Product Security SA because of major legal flaws, including a violation of the Constitution.

The lawmakers noted that the vigorous attempt of the BIR to put tax stamps on tobacco products “is in reality a revenue raising measure, an act which obviously is not within the ambit of its powers.”

The lawmakers warned that the “BIR and the DOF (Department of Finance) must be mindful not to usurp powers clearly vested to Congress by the Philippine Constitution.”

“It must be noted that the power to raise revenue is exclusively granted to the legislative branch of government and cannot be even delegated,” it said.