BIR wants inventory for cigarette tax stamps


Posted at Dec 24 2014 09:07 AM | Updated as of Dec 24 2014 05:07 PM

MANILA – The Bureau of Internal Revenue (BIR) has called on local cigarette manufacturers to hold a physical inventory of their prepaid excise tax stamps.

Under Revenue Memorandum Circular No. 89-2014, the cigarette firms were also ordered to pay the differential increase between the new excise tax rates and the current rates regardless if the stamps are affixed on the cigarette packs or not.

“All local manufacturers of cigarettes shall compute and pay the differential increase between the new tax rates and the current tax rates, according to the tax classification of their cigarette products, based on the number of internal revenue stamps, whether or not actually affixed to the packs,” BIR Commissioner Kim Henares said.

Starting January 2015, the excise tax rate on high priced cigarettes will rise P1 per pack to P28 from P27. These high priced brands include Marlboro and Philip Morris.

The levy on low priced brands such as Fortune and Mighty, on the other hand, will increase P4 a pack to P21 from P17.

Henares said the differential tax rate increase will be paid by cigarette manufacturers to the BIR not later than December 29, 2014, the last working day of the year.

“For purposes of validating the said tax payment, a physical inventory of all internal revenue stamps help in possession by all manufacturers of cigarettes as of December 31, 2014…shall be conducted by the authorized representatives of the BIR,” she said.

The results of the inventory will then be consolidated with the database of the BIR’s Internal Revenue Stamp Integrated System (IRSIS). In case of a discrepancy, the deficiency “shall be accordingly assessed and collected upon demand.”

“The database of IRSIS shall be updated according to the new tax rates with respect to the internal revenue stamps previously issued to and paid under the current tax rates, according to the price classification of cigarettes, by the concerned local manufacturers,” Henares said.

The inventory report of all tax stamps before the year ends aims to prevent the removals of cigarette packs from the place of production without paying appropriate taxes.

“This determination is for purposes of the proper imposition of the new tax rates in the event these cigarette products, with the said stamps duly affixed there to, shall be removed from the place of production on or during the said effectivity of the new tax rates,” explained Henares.

The tax stamp system is part of the BIR’s efforts to put a halt to the alleged illicit cigarette trade in the local market.