96.1% of cigarette packs in PH bear mandatory tax stamps, says WB

More than nine of every 10 cigarette packs sold in the country already bear the mandatory tax stamps, the latest data from the World Bank showed.

From the week of Aug. 23 to the week of Nov. 29, World Bank data posted on the Department of Finance (DOF) website showed that over 90 percent of the cigarette packs in retail outlets adhered to the Internal Revenue Stamps Integrated System (Irsis) on tobacco products, which the Bureau of Internal Revenue (BIR) started to implement late last year.

During the week of Nov. 29, about 96.1 percent of cigarette packs bear tax stamps, and all 13 brands being monitored have at least 90 percent of their inventory bearing such stamps.

The brands Boss, LA and Plaza had 100-percent compliance, while the 10 others—Camel, Champion, Fortune, Hope, Mark, Marlboro, Mighty, More, Philip Morris and Winston—had over 90 percent of their cigarette packs with stamps.

In terms of localities, 100-percent Irsis compliance was observed in the provinces of Bulacan, Pampanga and Pangasinan; 99.8 percent in Metro Manila; 93.5 percent in Quezon province; 90.2 percent in Negros Oriental; 85.7 percent in Laguna; and 66.7 percent in Cebu and Nueva Vizcaya. The lowest presence of tax stamps was in Davao del Sur, as only 30.3 percent of cigarette packs in retail outlets in the province bore stamps.

The World Bank is expected to come out with a full joint report with the DOF on the implementation of the Sin Tax Reform Law in January next year.

The BIR had ordered that all packs of cigarettes produced in the country since Dec. 1 last year must already be affixed with tax stamps, so that only stamped locally made cigarettes should be sold in the market by Mar. 1 this year.

As for imported cigarettes, all packs must bear tax stamps starting April 1.

Irsis is aimed at ensuring the collection of the correct excise taxes on tobacco products.

BIR Commissioner Kim S. Jacinto-Henares said last October that the World Bank’s preliminary 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 had explained that the small percentage of cigarettes in the market that do not bear tax stamps 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 had said.

The BIR chief had nonetheless also acknowledged that there remained 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.