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THE Bureau of Internal Revenue (BIR) will stick to its original
position on the tax classification of Pall Mall cigarettes, the
Department of Finance said.
Finance Secretary Margarito B. Teves said the
tax bureau would maintain the foreign brand’s classification as a
premium brand, entailing an excise tax of P26.06 per pack.
“I haven’t seen the full text of it, but the
gist of it is they maintain their previous ruling. After making
their comments they made up conclusion,” Teves said, referring to
a new position paper issued by the BIR.
Teves said the finance department will look into
the paper to come up with a final decision on the case, but this is
after his official trip abroad with President Arroyo scheduled this
week.
BIR’s position runs counter to that of the
finance department, which earlier ruled that Pall Mall is a
mid-priced brand subject to a P6.74 tax rate.
BIR Commissioner Lilian B. Hefti earlier said
the decision is reasonable.
Pall Mall is locally manufactured by La Suerte
Cigar and Cigarette Factory through a licensing agreement with
British American Tobacco Philippines Ltd. (BAT Philippines).
Under government’s regulations, local
production of a cigarette brand should be taxed the same as its
imported variant, as long as the importation was made first. In the
case of Pall Mall, local production came ahead of Duty Free
importations.
Legislators said the finance department erred
when it classified Pall Mall as a mid-priced brand.
-- Chino S. Leyco
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