Bureau of Internal Revenue (BIR) Commissioner Kim S. Jacinto-Henares considered the study made by a London-based think tank as inaccurate, particularly the P22 billion revenue loss estimate from the rampant consumption of untaxed cigarettes in 2014.
Henares said the study made by the London-based Oxford Economics (OE), officially released in Hong Kong to the media last September 29, is biased as it was commissioned by Philip Morris Fortune Tobacco Corporation (PMFTC), the country’s biggest tobacco products’ manufacturer.
The revenue chief, however, did not elaborate apparently to avoid being dragged into a trade war between the PMFTC and its small competitors, such as Mighty Corp (MC), which the former had been repeatedly suspecting of engaging in trade malpractices to increase its market share and profits.
Henares cited a World Bank study which showed that only five percent-not 19 percent as claimed by OE – of the total cigarette consumption yearly are sourced from the illicit cigarette trade.
She said everything is being done to stop the distribution of cigarette packs that do not have the required revenue stamps.
Henares also disclosed that she will come out within the next few days with a revenue memorandum order requiring cigarette manufacturers to install closed-circuit television cameras (CCTV) at their production lines and warehouses to enable the BIR monitor the volume of the firm’s production and withdrawals.
Mighty Corp., the wholly-owned Filipino cigarette producers operating for the past 70 years, was the first to install CCTV cameras and other electronic gadgets in its factory in Bulacan in compliance with the BIR requirement under Republic Act No. 8240 which amended certain excise tax provisions of the Tax Code.
Henares said the BIR and the National Bureau of Investigation (NBI) are going after fake cigarettes and conduct raids of warehouses suspected of storing the contraband.
The tie-up resulted in the seizure of large quantities of untaxed cigarettes in Nueva Ecija and Batangas, including 94 assorted boxes of Marlboro Ice Blast, Marlboro Black, Marlboro Lights, Fortune International, Extra Marvel, Filter King, West Point Filter King, Champion Menthol, Winston Light, Pentagon and Dallas King which sources have not yet been established.
Cigarette packs, whether locally-manufactured or imported, shall be affixed with revenue strip stamps starting April 1 this year under Revenue Regulations No. 7-2014 which implemented the so-called sin tax law all.
BIR chief ordered earlier manufacturers and importers to strictly comply with the affixture of the tax stamps, instructing also wholesalers and retailers to get their supply with the authorized tax stamps.
Offenders, under the law, are liable to be sent to jail up to eight years and fined P50,000 for non-use of the tax stamps.
Stiff fines are collected from distributors and retailers caught in possession of the contraband prior to the filing of tax evasion charges for non-payment of excise and value-added taxes.
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