MANILA, Philippines - The government is studying a new technology that promises to help control, if not eliminate, smuggling and raise much needed revenue for the country.
Finance Secretary Cesar Purisima said a new system is necessary to stamp out illegal trade, especially in tobacco and alcohol industries.
“With the country’s coastal nature, it is difficult to fight smuggling. There is also lack of capability by port authorities to deal with contraband and corruption,” Purisima said.
Customs Commissioner Lito Alvarez and Bureau of Internal Revenue Commissioner Kim Hemares are also determined to wage a serious fight against tax cheats being undertaken through smuggling.
They said tax leakage from tobacco products alone is estimated at over 60 percent, which costs the Philippine government billions in losses in tax revenues.
“Such severe revenue losses have made several governments across the globe lose hope that mere strict enforcement of the law could eradicate the illegal trade,” a Department of Finance official who asked not to be identified said.
The hard fight against smugglers and tax cheaters have prompted law enforcers across the globe to benchmark to stoppng illicit trade.
“Many countries like Turkey, Brazil, California (US), Malaysia and many more which used to have serious problems arising from the illicit trade, especially of tobacco and alcohol products, have already resorted to a high-technology tax remediation system to combat contraband,” government officials explained.
The most dominant tax remediation system is a tax stamp technology with a track and trace capability. This has proven track record in helping countries stop illicit trade, including counterfeiting, they said.
With the use of highly secure tax stamps, the system allows for product authentication and correct tax collection.
Said to meet the highest global standards in the security industry today, the system allows governments to accurately monitor local production as well as importations on a near real-time basis and confirm the payment of the correct rate of excise tax for each pack of tobacco product.
Significant increase in excise tax collection will arise from the capture of what used to be undeclared production and misclassified or misdeclared tobacco production or imports.
Aside from its being at the top of its class – never copied and compromised – the highly secure track and trace tax-stamp technology is also being advocated by anti-tobacco and health advocate Framework Convention Tobacco Control (FCTC).