MANILA - A Lausanne-based firm which sent the Bureau of Internal Revenue (BIR) an unsolicited proposal to put tamper-proof security stamps on local sin products has agreed to lower the project cost, a ranking official of the BIR said Monday.

BIR Deputy Commissioner Lilia Guillermo said SICPA Product Security has committed to lower the entire cost of the tax stamping services it is offering.

"They (SICPA) are very cooperative. They agreed to lower the project cost," Guillermo said.

Another BIR official said SICPA also assured that the government's excise tax collections would increase once the project is in place.

A team from SICPA Switzerland arrived last month to start negotiations with the BIR for its tax stamping technology designed to curb smuggling of cigarette and alcohol products, and prevent leakages in revenue collections.

The Investment Coordination Committee of the National Economic and Development Authority (NEDA-ICC) has given BIR the green light to negotiate with SICPA.

This after lawmakers questioned the increase in the cost of the tax stamping project to P18 billion from P13 billion in only 3 years since the SICPA submitted its proposal to the BIR. The legislators also warned that the proposal could trigger the imposition of additional taxes on the public.

Without giving the new project cost, Guillermo said this would translate to a 20-centavo to 30-centavo increase in the price of a cigarette pack compared to the initial 50-centavo estimate.

Guillermo said: "A 20-centavo increase is acceptable to us."

She noted SICPA plans to set up its local office inside the central bank building in Pasay City should it bag the contract with the BIR. SICPA supplies the Philippine central bank tamper-proof ink used to print currencies and other sovereign documents.

Finance Secretary Margarito Teves earlier said that a deal between the BIR and SICPA would be sent back to the NEDA for board approval, and would be subjected to a Swiss Challenge.