BAT accused of double standard

Two lawmakers yesterday accused British American Tobacco (BAT), owner of the Pall Mall cigarette brand of double standard in interpreting and following Philippine tax laws.

Deputy House Speaker Arnulfo Fuentebella and Baguio City Rep. Mauricio Domogan said BAT should not be questioning the constitutionality of Republic Act 9334 otherwise known as the Alcohol and Cigarette Excise Tax law.

The two lawmakers noted that BAT is seeking protection from the law in the case of the Pall Mall cigarettes but at the same time it is questioning the constitutionality of the same law.

BAT has asked the Supreme Court to strike down as unconstitutional RA 9334 claiming that the company got an unfair tax classification for its Lucky Strike cigarette brand.  “On the one hand, BAT is questioning the constitutionality of Republic Act 9334 before the Supreme Court saying it prejudices their Lucky Strike brand.

In Congress, meanwhile, BAT is using the same law as some sort of ‘safe harbor’ to protect their Pall Mall line,” Fuentebella said in a statement.  BAT, however, said that in Lucky Strike, BAT questioned the law to the extent that it discriminates against new brands.

“In Lucky Strike, BAT questioned Annex D of RA 8240 as amended by RA 9334 to the extent that it discriminates against new brands. Existing brands listed in Annex D are paying excise rates based on their 1996 net retail prices whereas new brands are classified according to their current net retail prices,” BAT said in a statement.

BAT said it is not asking for the entire law to be declared unconstitutional but merely the discriminatory provisions specifically Annex D.

“Should the discriminatory provisions of the law be declared unconstitutional, all brands, whether existing or new, including Lucky Strike, would be subject to a price survey and classified for excise tax purposes according to their current net retail price instead of only the new brands being surveyed,” BAT said.

The apparent double standard surfaced during the House Ways and Means Committee hearing last week after BAT, under questioning from Domogan, admitted that the company has filed the petition with the Supreme Court.

The same observation was shared during the hearing by Philip Morris Philippines Manufacturing Inc., one of four other cigarette manufacturers who asked the Department of Finance to review its order reclassifying the excise tax of Pall Mall from P26.06 to P6.74.

Philip Morris said BAT is seeking protection from the provisions of RA 9334 protecting the tax classification of new brands but in the case of Lucky Strikes, BAT wants the provisions of RA 9334 protecting existing brands declared unconstitutional.

“It would appear that BAT only wants provisions of RA 9334 which are beneficial to its new brands to remain,” Philip Morris said.

“We would like to stress that our objective in requesting for a review of the alleged DOF ruling is to secure a stable fiscal environment for our company where the rules are clear, transparent and consistently applied by the government and respected by all members of the cigarette industry. Philip Morris may not like all the provisions of RA 9334 and RR 3-2006 but we honor the law and respect its entirety,” Philip Morris also said.