NEDA says it has not yet approved Sicpa proposal

MANILA, Philippines - The National Economic and Development Authority (NEDA) clarified yesterday that it has not yet approved the unsolicited proposal of Switzerland-based SICPA Product Security SA.

In a statement, NEDA said the agency merely provided a reasonable rate of return that would serve as a guide for the Bureau of Internal Revenue (BIR) in undertaking the Swiss challenge for the build-operate-transfer (BOT) tax enhancement program for locally manufactured cigarettes.

“At this stage, the NEDA-Investment Coordination Committee simply provided a reasonable rate of return in accordance with the BOT Law to enable BIR to proceed with the negotiations with the original proponent, namely the SICPA,” the statement said.

The agency added that the NEDA board would only approve the project after a successful outcome of a Swiss challenge to be facilitated by the BIR.

“The required Swiss challenge is then to be undertaken. A Swiss challenge is a form of public procurement which requires a government agency who has received an unsolicited bid for a project to be provided to government to publish the bid and invite other prospective private proponents to bid,” it said.

The tax enhancement program for locally manufactured cigarettes, commonly referred to as SICPA project in various news accounts, involves tracking, tracing and monitoring the cigarette products through the use of a secure automated system of tamper-proof strip stamps to be affixed in every pack of locally manufactured cigarettes for purposes of efficient excise tax collection, monitoring and field inspection.

NEDA issued the statement after former Socioeconomic Planning Secretary Ralph Recto likened the controversial P13-billion SICPA stamp-tax proposal to a potential NBN-ZTE scandal waiting to happen.

Recto warned that the public would shoulder the cost of adopting the SICPA technology which promises to curb cigarette smuggling through its stamp-tax system.

Recto, who is running for senator in the May elections, said the controversial nature of the proposal is also a natural magnet for “enterprising” government bureaucrats or their advisers who want a piece of the multi-billion action.

“Even this early, we hear some noises that a powerful group in government is pushing for this despite the perceived loopholes in the proposal and that the project cost has already soared to P17 billion out of the initial P13 billion,” the former senator pointed out.