BIR to summon cigarette firms

The Bureau of Internal Revenue (BIR) has vowed to get to the bottom of the proliferation of fake stamps in the market through a dialogue with all cigarette firms, Internal Revenue Commissioner Caesar R. Dulay said Monday.

Dulay told reporters that the BIR was not singling out homegrown Mighty Corp. in its investigation of counterfeit cigarette tax stamps in the market. “What we are trying to do is look at the root and the source of fake stamps. All cigarette manufacturers, we’ll invite them to a dialogue,” he said.

The BIR chief said he would meet with the cigarette companies right after their ongoing tax campaign kickoff for the 2017 payment period.

Separately, Internal Revenue Deputy Commissioner Jesus Clint O. Aranas told reporters that the BIR already sent out letters of authority (LOAs) to “a certain cigarette company and the others” as they wanted to investigate the industry as a whole. BIR records showed that LOAs—an official document that empowers revenue officers to examine and scrutinize taxpayers’ books in order to determine their correct tax liabilities—had already been issued to five firms controlled by the Wongchuking family, who owns Mighty.

Aranas said foregone revenues from fake cigarette tax stamps reach as much as P15 billion a year.

Early this month, the BIR confiscated in Cebu City the biggest volume of cigarettes bearing fake tax stamps, reportedly manufactured by Mighty, worth P2.45 million in excise taxes. The BIR confiscated Mighty cigarettes that the agency said had counterfeit tax stamps at the Metro Gaisano mall.

In a report, the BIR said it seized seven master cases, 35 reams and two packs of the Mighty white menthol variety; 58 master cases and eight packs of the green menthol on top of 97 master cases, 20 reams and two packs of the red menthol.

A master case contains 50 reams or cartons while each ream has 10 packs. At an excise tax of P30 a pack, foregone revenues from the confiscated products—a total of 81,562 packs—would reach P2.45 million.