The Bureau of Internal Revenue (BIR) expects to generate up to P15 billion in revenue from cigarette tax stamps to meet its P1.82 trillion collection goal this year.
“We are estimating it at P10-P15 billion and, with proper enforcement, maybe we can increase the collection, especially when we have to meet the demands of the P1.8 trillion target,” BIR Deputy Commissioner Jesus Clint Aranas told reporters on the sidelines of the bureau’s tax campaign kickoff in Manila on Monday.
BIR data showed that excise tax collections on tobacco products in 2016 declined by 8 percent from a year earlier, largely as a result of the graphic health warning and proliferation of fake stamps and cigarettes.
Total excise collections on tobacco last year dropped to P91.6 billion from P99.5 billion in 2015.
The BIR said it was looking to tap a third-party to monitor the proliferation of fake stamps and cigarettes after the joint operatives of the Bureau of Customs-Intelligence and Investigation Service (BOC-CIIS) and the Philippine National Police (PNP) simultaneously raided warehouses of raw materials for cigarettes in Bulacan and Pangasinan. Criminal charges were also filed against the owners of an illicit depot in Davao, where P50 million worth of fake cigarettes were seized.
The raw materials were used for making fake cigarette products like Marvels, Mighty, La Reyna Mascada,
Marlboro, Philip Morris, Jackpot and Skag Fortune, which are originally produced by Philip Morris-Fortune Tobacco Corp. (PMFTC).
The proliferation of fake cigarettes as well as fake stamps led the BIR to issue letters of authority (LOA) to Tobacco Industries of the Philippines, Wongchuling Holdings Inc., La Campana Fabrica de Tabacos Inc., Mighty International and Mighty Corp.
The BIR also said it would issue LOAs to other tobacco players in the country as a way of expanding its investigation into the use of fake tax stamps.
The BIR uses LOAs to inform taxpayers that they will be subjected to an audit, their books of accounts, records and other transactions examined and verified.
“We are not only looking at Mighty. What we are looking at is the proliferation of fake stamps which affect all the manufacturers that is why I am planning to meet with them and for them to give their recommendations,” Dulay said.
It is a misinterpretation to say that the BIR is singling out Mighty, Dulay noted, saying the bureau is trying to look at the root and source of fake tax stamps.
“We will just finish the kick offs of our tax campaign and then cigarette firms should be expecting an invitation from BIR for dialogue on the fake stamps,” he said.
The BIR reiterated that it needed capable people to generate enough revenue to fund the government’s ambitious infrastructure spending target of P8 trillion to P9 trillion by 2022.
The bureau said its employees must be exempted from the Salary Standardization Law (SSL) by the end of 2017, a proposal already submitted to Congress.
“We want to have it out before the end of the year hopefully,” said Dulay.
The plantilla positions at the bureau now stand at 21,000, but the agency actually employs 10,000. This means the BIR has over 11,000 vacancies.
“I am very hopeful that we can pass it before the end of the year,” Aranas noted. “This would really professionalize the BIR. We have been praying to professionalize the bureau and we’ll be able to hire the best of the best. And the best of the best will be interested to apply if we are given the right salary standard,” he said.
“The BIR, right now, is functioning on half its force and we are supposed to collect P1.829 trillion, burdened with the attrition law functioning at full strength with 100 percent capacity right now. So it’s only fair that the BIR also get the share of the needed workforce to collect taxes,” he added.
Aranas noted an exemption from the SSL is also a way of fighting corruption.