BIR, Swiss firm still talking on security scheme for cigarettes

MANILA, Philippines - Switzerland-based Sicpa Holding SA has yet to comply with the Bureau of Internal Revenue’s requirements to provide a new security scheme for cigarettes.

BIR officer-in-charge and deputy commissioner Nelson Aspe told reporters that Sicpa has yet to finish with all 80 documentary and technical requirements of the BIR.

Aspe said the company has complied with only 30 and has yet to complete all 80 requirements.

“SICPA has still to comply with so many requirements. We’re still in a negotiation stage,” said Aspe.

He said the BIR has to be very careful with the matter given the controversies surrounding it. Tobacco companies have expressed stiff opposition against the Sicpa proposal, saying that this would mean additional costs to them.

A BIR committee has endorsed the unsolicited proposal of SICPA that is expected to initially cost P2.05 billion.

SICPA Holding SA had earlier submitted an unsolicited proposal to the government to provide the service for the BIR’s plan to affix the tamper-proof stamps on cigarette packs.

Under Sicpa’s proposal, stamps shall be affixed on each pack of domestically produced cigars and cigarettes. The project consists of a track and trace system which combines proprietary security and tracking technologies for a complete and integrated security solution for anti-counterfeiting, production monitoring, distribution control and inventory taking for tax administration purposes.

It is projected to raise P13 billion in revenues for SICPA every year.

Under Republic Act 8240, which took effect in 1997, the government is required to incorporate the revenue stamps on to the design of the cigarette packs themselves as this would curb smuggling and plug tax leakages.

The permanent stamps would replace the easily detachable stickers presently placed on cigarette packs.

But the BIR until now has yet to come up with the guidelines on the affixing of the stamps.

Aspe said that the BIR’s priority is to have the project implemented as soon as possible to improve the government’s revenue stream.