BIR reports 99% tax stamp rule compliance

UP TO 99 percent of cigarette packs in the country now bear tax stamps, data from the Department of Finance (DOF) and the World Bank showed.

Liquor industry players, meanwhile, are closely working with the Bureau of Internal Revenue (BIR) to address concerns ahead of the planned implementation of the Internal Revenue Stamps Integrated System (Irsis) for distilled spirits and fermented liquor this year. Irsis is aimed at ensuring collection of correct excise taxes slapped on “sin” products.

Data on the DOF’s website showed that during the week of Jan. 3, 99.16 percent of cigarette packs in retail outlets adhered to Irsis on tobacco products, which the BIR started to implement in late 2014.

In the week of Jan. 10, monitored compliance was at 98.79 percent, while the week of Jan. 17 showed 99.08 percent compliance.

As of Jan. 17, all 13 brands being monitored—Boss, Camel, Champion, Fortune, Hope, LA, Mark, Marlboro, Mighty, More, Philip Morris, Plaza and Winston—showed 90 percent to 100 percent Irsis compliance.

The World Bank and the DOF is scheduled to come out early this year with a joint report on the implementation of the Sin Tax Reform Law.

Separately, in a meeting last month, the European Union-Philippines Business Network’s (EPBN) food and beverage committee and the BIR Large Taxpayers Service (LTS) have agreed to find ways to make the implementation of Irsis on distilled spirits less burdensome to business.

“It was discussed that the stamps will be bar-coded and linked to the excise tax paid for the specific product. Therefore, stamps bought will have to correspond to a specific brand and cannot be liquefied if not used,” the EPBN said in a report posted on the European Chamber of Commerce of the Philippines’ website.

According to the EPBN, such process “will bring changes to the stamp ordering system and will create substantial burden for importers, especially those which import small quantities of multiple brands.”

The EPBN nonetheless noted that the BIR-LTS “was very open to looking at alternative ways of applying the tax stamp to make it less burdensome for importers.”

Revenue Commissioner Kim S. Jacinto-Henares said last year that the country’s biggest tax-collection agency wanted the implementation of Irsis on distilled spirits to be capital- and technology-neutral.

“It is important that we do not impede production of goods or cause small factories to close down [if the tax-stamping process would be expensive],” Henares had said.