BIR asks Congress to rectify ‘inequity’ in cigarette brands

The Bureau of Internal Revenue (BIR) said yesterday that the courts will be more convinced to speed up cases against some cigarette companies if the "inequitous differential treatment" of existing brands versus new brands can be rectified by Congress.

This was the response of BIR Commissioner Guillermo Parayno Jr. to a challenge aired by some House members that the BIR should collect taxes first due from big companies like La Suerte Cigar and Cigarette Factory before pushing for a new excise tax law.

Parayno pointed out that the BIR has been doing exactly just that, its efforts are tied up in the courts.

According to Parayno, Branch 194 of the Regional Trial Court (RTC) of Paranaque denied last September the application of La Suerte Cigar and Cigarette Factory (La Suerte), and Telengtan Brothers and Sons, Inc. (TSI) for a temporary restraining order (TRO), La Suerte, a company engaged in the manufacture and sale of cigarettes (Astro and Memphis, among others), moved to enjoin the enforcement and implementation of Revenue Regulations (RRs) 9-2003 and 22-2003, which reclassified and imposes higher excise tax on cigarette.

The two RRs apply the revised tax classification of new brands of cigarettes and variants based on their current net retail prices as determined in a survey conducted by the BIR.

The RTC, in denying the prayer for TRO of La Suerte and TSI, reiterated the pronouncement laid down in Calo vs. Magno that "…it is a well established rule that injunction will not lie to restrain the collection of taxes…", and that "No court shall have the authority to grant an injunction to restrain the collection of any National Internal Revenue tax, fee or charges."

Branch 62 of Makati RTC denied a similar attempt by British American Tobacco Philippines, Inc. (importers and distributors of Lucky Strike) to enjoin the application of the said RRs.