BIR urged to collect correct excise tax on new cigarette brands

Ilocos Sur Rep. Eric Singson yesterday called on the Bureau of Internal Revenue to immediately implement the Comprehensive Tax Reform law or RA 8340 so that the government can collect the correct excise taxes of new cigarette brands amounting to P8-million a day.

Singson made the call after Finance Undersecretary Grace Pulido admitted before the House committee on ways and means that about P1.6 million in excise taxes each year have not been collected by the government due to the failure of the BIR to conduct price surveys that would enable it to determine the correct tax classification of new cigarette brands.

Singson said the Comprehensive Tax Reform Law was passed by Congress in 1997 purposely for the government to collect the correct excise taxes from new cigarette brands but the BIR has not implemented it for about six years.

Only upon the leadership of new BIR Commissioner Guillermo Parayno that the BIR made the mandatory price surveys on the new cigarette brands in March and the issuance of the Revenue Regulation No. 9-2003 that would fully implement the law.

During the price surveys conducted in March, 11 new cigarette brands were found to have higher retail prices than originally declared with the BIR. These brands, which include Astro and Memphis of La Suerte Cigar and Cigarette Co. and Lucky Strike of British American Tobacco, have been paying an excise tax of only P1.12 per pack because the suggested retail price it declared with the BIR in 1999 was below P5 while they are actually selling at an average retail price of P7.74 per pack.

Singson, a member of the five-man oversight committee on tax revenue laws passed by Congress, said: "Should the BIR have fully completed its price surveys of new cigarette brands soon after the passage of the law in 1997, the government could have earned more than P4-billion in excise taxes.