Most of tax stamps features compromised, says DOF

MANILA, Philippines -  Eight out of the 10 security features of the Bureau of Internal Revenue’s (BIR) tax stamps have been compromised by counterfeiters, the Department of Finance (DOF) said.

Finance Secretary Carlos Dominguez III said there is a need to redesign the current tax stamps as most of the  security features have been breached.

“We need to change it. Because apparently, of the 10 security features, the counterfeiters have already been able to copy eight,” Dominguez said.

He said this move is currently one of the priorities of the DOF and BIR considering the billions of leakages caused by the use of fake tax stamps.

Tax leakages caused by the proliferation of fake tax stamps have reached P10 billion to P15 billion annually, according to the BIR estimates.

“This is like the peso, the BSP (Bangko Sentral ng Pilipinas) checks regularly. There are many hooligans in this world. It’s big money,”  Dominguez said.

However, the secretary recognized that overhauling the features of the tax stamp would be expensive and increase the cost for the cigarette manufacturers.

“That’s why I said we have to have a chat with the cigarette companies...This time, we have to consult with them if they can afford it,” he said.

Meanwhile, the Metro Retail Stores Group Inc., the listed mall operator of the Gaisano Group, has reported to the BIR that the 82,902 cigarette packs bearing fake tax stamps recently found in its Super Store mall in Mandaue, Cebu were purchased directly from Mighty Corp., the Bulacan-based cigarette company owned and operated by businessmen Ceasar and Alex Wongchuking.

The BIR is conducting an investigation into the matter after its examiners in Cebu confiscated and seized 82,902 Mighty cigarettes with fake stamps during an inspection early this month. 

Mighty spokesperson Oscar Barrientos said they would await the results of the BIR’s ongoing investigation.

“We will wait for the results of the investigation. It is premature at this time to say the stamps are fake,” Barrientos told The STAR in an interview in  Makati last week.

 In a Feb. 15 letter to BIR Commissioner Ceasar Dulay, Metro Retail said the 82,902 packs of Mighty cigarettes that were found bearing fake stamps in its Mandaue mall were sourced from Mighty itself and not from any other supplier.

“We confirm that (the) products of Mighty Corp. which were seized by your BIR examiners were purchased directly from Mighty Corp. with TIN-000-238-810 as borne by our records,” Metro Retail said in its letter to Dulay.

Other cigarette brands from other suppliers were also checked and the tax stamps were found to be genuine, Metro Retail added.

However, Barrientos declined to confirm if the cigarettes came from Mighty, noting that their company’s TIN is “well known.”

“The TIN is a public knowledge because it is indicated in the invoice or the ORs,” Barrientos said.

Earlier, Dulay told reporters the bureau would invite cigarette firms for a dialogue to address the proliferation of fake tax stamps in the market.

In the latter part of 2016, the government had discovered bogus fake stamps being manufactured in different parts of Luzon, which led to an industry-wide investigation by the BIR.