MANILA, Philippines - The chairman of the House Ways and Means Committee wants Switzerland-based SICPA Product Security SA (Sicpa) to address the concerns raised by the committee on the firm’s allegedly anomalous negotiations with the Bureau of Internal Revenue (BIR).
Antique Rep. Exequiel Javier, chairman of the committee, said the negotiations between Sicpa and the BIR would not have taken a long time to conclude if only Sicpa followed government processes and requirements.
“There are laws to follow. Sicpa and government representatives in the bidding committee should have complied with the process provided under the Build-Operate-Transfer Law,” Javier said.
The House Ways and Means Committee has recommended a stop to the on-going negotiations between the BIR and Sicpa because of major legal flaws.
Sicpa earlier submitted an unsolicited proposal to the BIR to provide security stamps on cigarettes but the BIR has yet to act on it as it is still seeking a legal opinion from the Department of Justice on whether it can go ahead with the project.
Under Sicpa’s proposal, stamps shall be affixed on each pack of domestically produced cigars and cigarettes. The project consists of a track and trace system which combines proprietary security and tracking technologies for a complete and integrated security solution for anti-counterfeiting, production monitoring, distribution control and inventory taking for tax administration purposes.
“Sicpa should directly address the problems enumerated in our committee report,” Javier said.
The legislator noted that Sicpa and the BIR have both failed to show proof during several congressional hearings that there is massive illicit trade of tobacco products in the country.
He cited that even the National Economic and Development Authority (NEDA) and the National Tax Research Center (NTRC) expressed doubts as to the claims of Sicpa that the government would be able to collect a total of P70 billion a year by using its “tamper-proof “ strip stamps.
For its part, the NTRC said that Sicpa’s assertion still needs to be validated because it is “largely based on its assumption … from certain local and international studies on cigarette trade…that the Philippines is suffering from tax leakages in excise tax collections on tobacco products as well as rampant trade of counterfeit tobacco products.”