MANILA, Philippines - The Department of Finance hopes the new administration will adopt the unsolicited proposal of the Sicpa Security Products SA for a system of excise-tax collection aimed at plugging leaks that the current officials of the department believe will help trim the budget deficit.

Finance Secretary Margarito Teves said, “Given the limited time, the project can be continued [by the next administration]. . . I have always said the technology matters more, that it is going to be helpful. The name or proponent is only incidental.”

He acknowledged that the Bureau of Internal Revenue (BIR) as implementing agency has very little time now to obtain the legal opinion needed to solidify the government’s position that taking on the unsolicited Sicpa proposal to track each piece of cigarette or bottle of alcohol for excise-collection purposes is perfectly within the powers of the Executive Department.

“The issue here is that Congress, a coequal branch, has said the proposal is illegal, that we [in] the Executive cannot do it. That is what we are trying to confirm from the Department of Justice, [DOJ]” said BIR chief Joel Tan-Torres. The DOJ has not confirmed the BIR position as of Sunday.

The Sicpa has said as much as P75 billion in incremental revenues may be raised with their proprietary technology “that is now used by the Turkish, Thai and other governments and are benefiting from it.”

Congressional objection is based on the grounds it will force manufacturers to raise prices, make the products even more unaffordable because manufacturers will simply pass on the additional cost to consumers, and make it even harder for the government to raise revenues from the sector.

Nevertheless, the BIR argues that it had managed to bring the potential cost down of the program to 20 centavos per pack of cigarettes from the original cost of 50 centavos, so that the pass-on cost should also be lower.

The technology, the BIR added, could put a stop to rampant smuggling and undervaluing of excisable products with the technology in place.