BIR adopting digital system of tracking cigarette supply, distribution

MANILA  -The Bureau of Internal Revenue will soon implement a digital system of tracking the supply and distribution of tobacco products in the country, one that would also allow consumers to check if they’re buying smuggled or counterfeit cigarettes to help counter illicit trade of the commodity and plug revenue leakages.

This would improve the BIR’s current Internal Revenue Stamps Integrated System (IRSIS), a platform that manages the affixing and distribution of revenue stamps on tobacco products that were properly levied with excise tax, Revenue Commissioner Romeo Lumagui Jr. told a forum organized by think tank Action for Economic Reform (AER) on Tuesday.

Lumagui said the BIR would include QR codes in cigarette tax stamps that consumers could scan using their mobile phones to check the legitimacy of tobacco products that they buy. The bureau has started talks with potential suppliers for the program, which is targeted to be implemented by January 2025.

Tax stamps validation

“Right now, one of our challenges with respect to the current system is we have limited gadgets to check the validity of the stamps and the lack of manpower,” Lumagui said.

“With this solution, we have plenty of gadgets and the public can help us. We will be able to know the concentration where these illicit products are located,” he added.

Government data showed revenues from excise taxes on alcohol and tobacco products amounted to P261.64 billion in 2022, 2 percent lower compared to the 2021 collection.

Last year’s haul also fell below BIR’s goal of P313.2 billion due to disappointing collections from tobacco products. This year, the state is hoping to raise P359.17 billion from sin taxes, P244.06 billion of which will come from tobacco.

Ahead of the implementation of a digital tracking system, Lumagui said the BIR will soon release a new memorandum updating the schedule of fines and penalty for violators of excise tax rules as further “deterrent” to tobacco smuggling.

“We want to start as early as possible,” he said.