Tax collection on sin producs to go high-tech soon

Jan	07
2009

Tax collection on sin producs to go high-tech soon

abs-cbnNEWS.com | 09/19/2008 7:56 PM

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The government would soon implement a new security measure to ensure that the manufacturers of tobacco and alcohol products are paying the proper excise taxes.

Finance secretary Margarito Teves said the tax bureau would be choosing among fused-on stamps, labels, and barcodes to be placed on sin products. He said these are "part of adopting innovative technologies to improve the tracking of duties and taxes due to the government."

The proposal for a security measure on cigarettes and alcohol products was raised by Switzerland-based SICPA Holdings when President Gloria Macapagal Arroyo visited Davos, Switzerland last year. SICPA chairman Maurice Amon hosted a dinner for president Arroyo.

"The adoption of innovative business intelligence techniques and state of the art technology based measures contribute to the improvements in the tax collection by helping the BIR and Bureau of Customs to flush out fraudulent practices and detect misdeclaration and undervaluation of imports," Teves stressed.

Currently, tax revenue officers are assigned to physically guard the movement of goods in the manufacturing plants of tobacco and liquor makers.

The government has been intensifying the monitoring of manufacturing facilities of tobacco and alcohol products to beef up tax revenues.

An 8 percent increase in the tax rates are slapped on sin products under Republic Act 9334. Excise tax on sin products increases every two years until the increase reaches 20 percent by 2011.

Yet, In 2007 excise taxes from manufacturers of cigarettes and liquor was P2.5 billion short of the P44.64 billion target, data submitted to the Congressional Oversight Committee on Comprehensive Tax Reform Program showed. This data was based on the excise tax collected from tobacco and alcohol products withdrawn from the warehouses of local manufacturers.

The P2.5 billion shortfall was mainly due to lower excise tax collections from tobacco products. Last year, excise tax from tobacco products plunged plunged 11.5 percent to P23.21 billion and was P3.4 billion short of the P26.6 billion target. Collections from alcohol products rose 17.7 percent to P18.95 billion or P919 million more than the programmed collection of P18.03 billion.

The resulting lower tax take was attributed to the decision of local manufacturers to front load their withdrawals from warehouses late 2006 to take advantage of lower rates.