Tax stamps for alcohol products likely in 2016

THE IMPLEMENTATION of a tax stamp system covering alcohol products may be pushed back to next year due to lack of time to do so this year, according to the Bureau of Internal Revenue (BIR).

“I don’t think this year, maybe next year. When next year, I don’t know,” BIR Commissioner Kim S. Jacinto-Henares told reporters last Friday when asked about the plan to expand the Internal Revenue Stamps Integrated System (Irsis) to also include distilled spirits and fermented liquor. Irsis aims to collect the correct excise taxes on “sin” products.

“We’re still studying it and consulting with stakeholders so that its implementation would not be obstructive to business,” she added.

Also, Henares disclosed that a preliminary World Bank report monitoring the implementation of Irsis on tobacco products showed that only 5 percent of cigarettes in the market do not bear tax stamps.

The World Bank is seeking the Department of Finance’s comment on its findings.

Henares said the 5 percent may not necessarily be “illegal” in the sense that their local manufacturers or importers had not paid the correct excise taxes, citing that there may be old stocks of unstamped cigarettes still being sold.

“By special provision of law, [those unstamped cigarettes] are illegal, but to say they did not pay taxes, not necessarily,” Henares said.

The BIR had ordered cigarette manufacturers and distributors to sell only stamped cigarettes this year—all cigarette packs produced domestically must already be affixed with tax stamps since December so that only stamped locally made cigarettes will be sold by March; for imported cigarettes, all packs should bear tax stamps since April.

The BIR chief said the World Bank report indicated that as far as the implementation of Irsis on cigarettes was concerned, “there’s always room for improvement, and we should always be on guard.”

Henares cited that there remain unscrupulous entities that do not follow the law.

Last July, the BIR confiscated more than 42,000 packs of locally made and imported cigarettes in Batangas that lacked tax stamps, on top of a previous raid that yielded illegal products in Nueva Ecija last June.

In this regard, the BIR had already intensified its monitoring of cigarettes products as well as their manufacturers and sellers.

“The BIR, through its authorized representatives, shall conduct on-the-spot surveillance of cigarette products either in the place of production, storage facilities, or in the domestic market, as the case may be, through the use of mobile verification devices issued for the purpose of ensuring compliance” with Irsis, the agency had said.