Philip Morris offers new technology to curb smuggling

MANILA, Philippines - Philip Morris Philippines, Inc. (PMPI), the local unit of US-based cigarette manufacturing giant has reiterated its offer to the government to provide the Bureau of Internal Revenue (BIR) a security technology that aims to curb smuggling of cigarettes.

Philip Morris president Chris Nelson said that it is offering to the Aquino administration its technology called Codentify, which hopes to address the problem of smuggling by providing numerical codes to cigarettes.

The numerical codes will be printed on each cigarette pack and would only entail the use of ink and printers, Nelson said.

Nelson said the technology the company is offering is much cheaper than the technology offered by Switzerland-based Sicpa Securities SA. Sicpa’s technology involves the use of security stamps which is estimated to cost an additional 52 centavos per pack of cigarette.

On the other hand, Nelson claimed that the technology offered by Philip Morris would result only in an additional cost of less than 10-centavos per pack.

However, Nelson said the company has yet to wait for the BIR to get back to the company regarding its offer because it already had initial discussions with the previous administration.

Swiss company’s Sicpa offered its technology to the Macapagal-Arroyo administration but the Justice department earlier issued an opinion rejecting Sicpa’s proposal, saying that it would mean additional costs to the government.

The BIR has said that there is now a new search for a more appropriate technology whose capabilities are more to scale and certainly not expensive.

Sicpa earlier offered a track-and-trace system estimated to generate up to P70 billion a year in additional revenues from alcohol and cigarette manufacturers.

Lawmakers and industry players have objected to its multibillion-peso price tag, saying it will force the industry to pass on the added burden to consumers in the form of price increases.

The Aquino administration hopes to plug revenue loopholes by curbing smuggling and corruption in the BIR and the Bureau of Customs (BOC).

It expects the budget deficit to hit P325 billion this year or 3.9 percent of gross domestic product (GDP).