BIR: Cigarette tax stamps to also cover exports

Posted at 07/14/14 4:23 PM

MANILA, Philippines – The cigarette tax stamp system will also be implemented on Philippine-made tobacco products intended for overseas markets, the Bureau of Internal Revenue (BIR) said.

BIR Commissioner Kim Henares said this will help address the issue on illicit trade on cigarettes by ensuring that cigarette packs intended for consumers overseas will not be given access to the domestic market without paying the appropriate taxes.

“Once the stamp tax system is fully implemented, it’s easier for us to determine which cigarette pack is smuggled or illegally manufactured by simply looking at the pack. This will address the industry’s problem on illicit trade,” she said.

Under the scheme, the tax agency will be requiring local cigarette manufacturers to affix the Philippine government’s tax stamp if the market where the product will be sold has no security stamp system.

However, Henares said cigarette packs intended for foreign markets are not required to pay the local excise tax.

“If the cigarette will be exported to Thailand for example, the manufacturer is no longer required to attach our tax stamp. What they will do is affixed Thailand’s own tax seal, which of course, they will get it from the Internal Revenue of Thailand,” she said.

“But if the product is destined to a market that has no stamp tax system yet, then BIR will require the manufacturer to affix our own stamp tax at a minimal cost of P0.13 apiece,” she added.

The BIR will soon release its revenue regulation on the tax stamp.

Henares earlier said that the tax agency and state-run APO Production Unit Inc. are now preparing to distribute the new security stamp to local cigarette manufacturers.