Lawmaker says SICPA is like controversial NBN

MANILA, Philippines - The House committee on ways and means has asked the Bureau of Internal Revenue (BIR) to temporarily put on hold the Swiss challenge bidding for the P18 billion revenue stamps labeling for cigarettes proposed by the Lausanne-based SICPA Product Security Inc.

Deputy Speaker Eric Singson (Lakas-Kampi, Ilocos Sur) said committee members want the BIR to exercise caution in pursuing the project which he likened to the scandal-ridden $328 billion National Broadband Network project.

Singson said congressmen have noted many loopholes in the Swiss firm’s proposal for the BIR to adopt its stamp security system of monitoring cigarette sales and ensuring that excise tax on the product is properly levied.

He said that aside from imposing an additional tax burden on cigarette farmers and manufacturers, a P5 billion increase in the cost of the project had been demanded by SICPA barely three years after it made the formal proposal to implement it.

“We asked BIR to put everything on hold while the legislative inquiry is still ongoing,” he added.

At the recent news forum in Quezon City, acting BIR Commissioner Joel Tan-Torres revealed that at least four foreign firms are interested in joining the Swiss challenge bidding.

“But nothing is definite about it (the project), if it will be pursued with SICPA. Under the law there is a need to impose a system of monitoring excise tax (on cigarettes products),” he said.

He agreed that the BIR must observe caution in implementing the project as recommended by congressmen. 

“We are being very careful in evaluating what is the best system for this,” he said.

Singson said senior members of the ways and means panel have also aired serious doubts the BIR can implement the SICPA proposal without the passage of a law by Congress.

“This is because in order to pay SICPA, government must impose a P0.52 centavo per pack of cigarette sold. This is already a form of taxation, therefore, there should be a law to make this legal,” the administration lawmaker added.

He said the imposition of additional cost for cigarette production will “badly affect” the small cigarette companies and our farmers who will have to face lower sales once they pass the tax burden to consumers.

During the ways and means committee hearing last Wednesday, Baguio City Rep. Mauricio Domogan warned the BIR that it would commit serious violations of the Constitution if it will sign the SICPA contract since this would result in passing on the cost of the project to cigarette manufacturers and the public.

“Whether you like it or not, this is a form of taxation. Adding cost to be passed on to consumers, to me, is just another form of taxation which I don’t think can be done by mere signing of contract but by legislation,” he said.