BIR to monitor cigarette, liquor firms more closely

The Bureau of Internal Revenue (BIR) is set to impose a stricter monitoring of cigarette and liquor companies to ensure that they are paying the right amount of excise taxes, a ranking official said during the weekend.

BIR deputy commissioner for operations Nelso Aspe said the agency is set to adopt a new type of fused-on stamps for cigarettes and liquor products or install an added security feature on these stamps to ensure that they are not duplicated.

The agency affixes these fused-on stamps on packages containing cigarettes and alcoholic beverages to monitor the production of these products and thereby compute the manufacturer’s excise tax liabilities.

“We will intensify our monitoring of these manufacturing facilities,” Aspe told reporters. He said the BIR will deploy more revenue officers on premises or ROOPs to double check whether cigarettes and liquor products manufacturers are paying the right amount of excise taxes.

Adopting a new type of fused-on stamps, Aspe said, would help protect the agency from fraudulent practices of some companies such as duplication of the stamps.

The affixture must be done in such a manner that will prevent the fused-on stamps from being removed and re-used by washing or any other means and from covering any warning that may be required by law to be printed on cigarette packages.

Aspe said the agency would tap a foreign company to provide the stamps and create the new design using a security ink.

“Before the products leave the factory, our ROOPs will check the manufacturer’s excise tax payments using these stamps,” Aspe said.

The agency, under heavy pressure to meet its revenue target for the year of P730 billion, is hoping to implement the new system immediately, the BIR official added.

The agency incurred a revenue shortfall of P40 billion in the first semester of the year, widening the government’s budget deficit to P37 billion during the period. The programmed deficit was P31 billion.

Latest data show that the BIR’s excise tax collection suffered a double-digit drop in the first quarter from a year ago.

Excise tax collection reached only P10.4 billion in the first three months of the year, or 27 percent lower than the P14.2 billion recorded in the first quarter of 2006, data from the agency showed.

Of the total excise tax collection in the first quarter, the BIR collected P4.5 billion from taxes on cigarettes.