Philippines Urged to Adopt Virtual Stamps

A senior legislator in the Philippines wants the Bureau of Internal Revenue (BIR) to create “virtual stamps” for export cigarettes to deter their smuggling into the domestic market, reports Business World.

At a hearing conducted by the House Committee on Ways and Means on March 22, Representative Jose Ma. Clemente S. Salceda proposed a “less visible” form of security labelling along with material labelling features.

Salceda also reiterated his call for the BIR to revoke a rule that exempts cigarettes sold for export from tax stamp affixture, adding that unstamped export cigarettes were a key source of supply for smugglers. Cigarettes for domestic sale affixed with tax stamps indicate that the manufacturer has paid the required excise taxes.

The House tax panel has found that tobacco smugglers evade excise taxes by declaring tobacco products “for export.”

BIR Deputy Commissioner Arnel SD. Guballa said while the agency supports stamps on export cigarettes, manufacturers expressed concerns that this could deter foreign markets since most other countries prefer the products to be shipped without stamps.

“The international market demand is for cigarettes to have no stamps,” he said.

The government loses PHP30 billion annually due to untaxed tobacco products on the domestic market. In February, the Philippines’ Bureau of Customs declared an “all-out war” against cigarette smuggling.