Philippines
Tax stamps for tobacco products are a good thing for the industry, according to a cigarette maker, saying the system implemented by the Bureau of Internal Revenue (BIR) can help curb illicit trade in the Philippines. The company, however, noted the sin tax law has disrupted the market.
Paul Riley, president of Philip Morris International Fortune Tobacco Corp. (PMFTC), said the implementation of the internal revenue stamps integrated system (IRSIS) will help combat the proliferation of illegal cigarettes in the Philippines market.
“While the significant tax increases, starting early 2013, caused some disruption in the market, we congratulate the BIR on the introduction of tax paid stamps on December 1 last year,” said Riley in an e-mail message to GMA News Online. “This physical on-pack proof of tax compliance will greatly assist in the fight against the illicit cigarette trade.”
BPI economist Nicholas Antonio Mapa said sales of “sin commodities” such as alcohol and tobacco “continue to be robust, notwithstanding the additional tax slapped on the retail price.”
The BIR implemented the IRSIS under the sin tax law to shore up its tax collection and curb smuggling in tobacco products. Under the new system, all imported and locally-manufactured cigarette packs need to have internal revenue stamps that carry several security features. The tax stamps aim to help the BIR monitor if obligations such as excise taxes have been paid
Mapa said a challenge facing the IRSIS is guarding the tax stamps and making sure these are not faked. But in theory, he said the imposition of tax stamps on tobacco products should improve collection “as it would be proof that tax duties have been paid on the commodities being sold.”