Sicpa could earn P64.5 billion more annually

MANILA, Philippines - SICPA Products Security S.A. (SICPA) of Switzerland could earn P64.5 billion more annually if the government requires hundreds of thousands of sari-sari store owners to lease a hand-held device that could detect contraband or counterfeit products.

According to the unsolicited proposal of SICPA, an annual lease charge of P150,000 per device must be paid for its SICPAmobile, the only tool that could read the security codes embedded by SICPA.

Considering that there are about 430,000 sari-sari stores nationwide — as gleaned from a report by industry tracker Nielsen Co., SICPA could amass P64.5 billion every year, or a whopping P451.5 billion during the seven-year implementation of the tax stamp scheme.

So far, SICPA is requiring only “an agreed number of field audit devices” from the national government. But “if additional field audit devices are needed, they can be leased for $3,000 per device (or roughly P150,000), per year.”

Sari-sari store owners randomly interviewed say they would vehemently reject this proposal as this would mean an additional cost of at least P12,500 a month for them.

Local cigarette manufacturers have also thumbed down the proposal because of the prohibitive cost it entails. Besides, they also refused to use such an outdated technology.

The House ways and means committee had already asked the Bureau of Internal Revenue (BIR) to stop its negotiations with SICPA because of major legal infirmities, including a violation of the Constitution.

The lawmakers noted that the vigorous attempt of the BIR to put tax stamps on tobacco products “is in reality a revenue raising measure, an act which obviously is not within the ambit of its powers.”

Former Sen. Ralph Recto, who was also an ex-director general of the National Economic and Development Authority (NEDA), had said tax stamp contract “an NBN-ZTE scandal waiting to happen.”

Tobacco farmers had also filed a complaint before the Office of the Ombudsman, arguing that BIR’s insistence to put tax stamps on every pack of locally manufactured cigarettes would mean an additional cost of 52 centavos in the retail price of cigarettes which can “kill both the demand for tobacco products and their livelihood.”

“The undue burden and additional charges have a devastating effect upon our livelihood because the SICPA system is an industry killer that will cause consumers to shy away from tobacco products due to a system that is unreasonable and unlawfully approved,” the farmers said.