New administration to decide on Sicpa's stamp tax proposal

MANILA, Philippines - The decision on the controversial security stamp tax proposal of Switzerland-based Sicpa Security may slide down to the next administration given the need for more time to study the proposal, Finance Secretary Margarito Teves said during the weekend.

“The Bureau of Internal Revenue (BIR) is the one that will decide on that so if there is limited time it can be continued (by the next administration),” he said.

Sicpa, a company that provides security stamp tax services to various governments across the globe, 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.

The BIR sought a legal opinion after lawmakers and tobacco manufacturers have opposed the project, saying that the negotiations with Sicpa lack transparency and are illegal.

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.

BIR Commissioner Joel Tan-Torres disclosed that no less than Justice Secretary Alberto Agra has personally assured him that his department would give top priority to their request for a legal opinion on its negotiations with Sicpa.

In a separate interview last week, Tan-Torres said there are no updates yet on the Sicpa proposal as the BIR is still waiting for the opinion from the Justice department.

The opinion would help the BIR decide on whether or not it would pursue negotiations with the Swiss firm.

If the tax agency decides to accept Sicpa’s proposal, it would have to submit such proposal again to the National Economic and Development Authority for a final evaluation.

After this, the government would have to subject the proposal to a Swiss challenge wherein a third party would be given the chance to match Sicpa’s proposal.

Teves said that if negotiations between the BIR and Sicpa are not concluded within the month, it would be the next administration that will decide on the matter.

The Finance chief assured that the government is after the technology that Sicpa can offer.