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MANILA - The Bureau of Internal Revenue will push through with its plan to bid out a controversial security stamp tax that will curb smuggling of tobacco products as prices of local cigarettes are expected to shoot up within the year.
Commissioner Kim Jacinto-Henares said the bureau is finalizing the terms of reference for the bidding.
"We intend to do a straight procurement via public bidding very soon, so that the security stamp tax will be implemented within the year," Jacinto-Henares said.
The bidding was supposed to start in the first half of the year.
"The technology that they would be introducing, the security features, and of course, the lowest offer price in favor of the government" would determine the winning bid," the BIR chief said.
“The bidding would strictly pertain to the technology that will be used on cigarette products. Alcohol products would then follow,” she said.
Citing World Health Organization's Framework Convention on Tobacco Control, which the country is a signatory to, Jacinto-Henares said cigarette firms would be disqualified from participating in the bidding.
"When before we were of the opinion that PMFTC's participation in the bidding would raise an issue of conflict of interest, now we already have the FCTC to disqualify them, and other cigarette companies who may want to participate in the bidding," she said, referring to Philip Morris Fortune Tobacco Corp.
"We will invoke that if any of the cigarette companies will insist in participating," she said.
Earlier this year, the BIR commissioner said that at least five companies, mostly foreign firms, signified interest in the tax stamp project.
PMFTC, which controls at least 90 percent of the domestic tobacco market, earlier made a counter proposal to Switzerland's Sicpa Products Security SA's unsolicited bid.
China's Huagong Tech Co. Ltd submitted a similar proposal to curb smuggling.
Huagong Tech said its proposal was cheaper than Sicpa's P0.52 centavos and that of PMFTC's 10 centavos a pack.
"We would like to clarify that the security stamp tax is not a revenue measure but a move to deter cigarette smuggling into the country," Jacinto-Henares said.
The forthcoming bidding for the security stamp tax project will come on the heels of the passage at the House of the sin tax reform bill, which aims to increase tax collections from cigarette and liquor products.
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