BIR expects tax stamps to plug revenue leaks

The government is hopeful that the new tax stamps on cigarette packs, which authorities can check electronically, will help plug any remaining leaks in revenue collections.

Revenue Commissioner Kim Jacinto-Henares announced the start of the rollout of the agency’s Internal Revenue Stamps Integrated System (IRSIS).

This mandates all tobacco manufacturers and importers to put stamps on their cigarette packs.

“This may increase collections because this is a stricter control,” Henares told journalists at the sidelines of the 110th anniversary celebration of the Bureau of Internal Revenue’s (BIR) Friday.

The implementation of the IRSIS comes amid recent allegations that some local cigarette manufacturers have been selling illicit cigarettes. These are tobacco products sold without the proper tax payments.

A recent study commissioned by Philip Morris showed that the government lost P15 billion in revenue last year from the illicit trade of cigarettes.

Henares doubted the veracity of the study’s claims. She admitted that there could be some illicit products in the market, but said that the Philip Morris study’s estimates were overblown.

“Even if it were true, it’s not that big,” Henares said, referring to the size of the study’s estimates. “If the problem is really that big, it means those complaining are also engaged in illicit cigarette sales.”

Although the IRSIS is scheduled to take effect on Sept. 1, a number of tobacco firms have said that they would already put tax stamps on cigarettes to be produced as early as next month, the BIR said.

By January next year, all packs of cigarettes to be sold in the market should have the tax stamp, as companies are given until yearend to sell or pull out of retail shelves unstamped packs produced until the end of August.

The new tax stamps will come in different colors, and will feature an image of a butanding or whale shark.

The new stamps will also have a machine-readable quick response (QR) code that, once scanned, will show when a particular pack of cigarettes has been manufactured and when the appropriate taxes have been paid.