House zeroes in on tobacco and alcohol Stamps

Members of the House committee on ways and means chaired by Rep. Dakila Carlo Cua (Quirino, Lone District) this week held a hearing to scrutinize the implementation of the Internal Revenue Stamps Integrated System (IRSIS) on tobacco and alcohol products by the Bureau of Internal Revenue (BIR), the Department of Finance (DOF), and the APO Production Unit Inc.

The committee sought the justification of the proposed stamps and the security measures to ensure that the manufacturing of counterfeit stamps is prevented and the welfare of wholesalers, retailers and consumers is protected.

During the briefing, BIR officials led by Commissioner Caesar Dulay and BIR Operations Group Deputy Commissioner Nestor Valeroso explained that the purpose of the stamps is to monitor the collection of taxes generated from purchased alcohol and tobacco products.

Rep. Prospero Pichay (1st District, Surigao del Sur) said the proposed method by the BIR is 'jurassic' and advised the committee to explore different approaches in preventing the manufacturing of counterfeit stamps.

The present system will not guarantee us that there will be no manufacturing of fake stamps or fake cigarettes. What we want is a preventive system wherein it would be very difficult for the cigarette manufacturers to manufacture fake cigarettes, said Pichay.

Pichay advised the BIR to upgrade into modernized methods such as digital, online and/or laser stamps which are incorporated with security features.

In addition, Pichay pointed out that taking advantage of these methods will likewise spare the committee from determining the competence of APO Production Unit, Inc.

Committee vice chairperson Rep. Lianda Bolilia (4th District, Batangas) agreed with Pichay's views.

I don't think the change of the stamp design would be enough or will again be an effective measure to stop the production of fake stamps, because if you change the design, the culprit will also change the design, and if you change the design every now and then, we'll just be wasting our money and time, said Bolilia.

Deputy Speaker and Marikina City Second District Rep. Romero Quimbo questioned the selection process by which APO was chosen for the IRSIS project. He further said the BIR does not have the necessary expertise for its responsibility on the IRSIS implementation.

Quimbo likewise ordered the BIR to provide timelines and supporting documents that will justify the appointment of APO.

Rep. Antonio Tinio (Party list, Act Teachers) said the committee should not authorize the BIR to impose the new tax law considering that its proposed alcohol products stamp, which was passed by Congress five years ago, has not been implemented until now.

Cua said that APO does not have enough equipment to assume the responsibility, considering it only has 35 taggant detectors and readers to identify the validity of 3.9 billion stamps.

Cua likewise inquired about the rough target of BIR as to when IRSIS will be implemented.

The BIR said it aims to implement the IRSIS by the end of the year.

Meanwhile, the committee ordered the provision of documents pertaining to the procurement process, terms of reference, performance reports, and timelines.

In 2013, the BIR chose the APO Production Unit, a government-run company under the Presidential Communication Operations Office (PCOO), for the IRSIS project because security stamps are considered accountable forms.

Based on the Government Procurement Reform Act, government offices which need printing of accountable forms must avail of the services of the Bangko Sentral ng Pilipinas (BSP), National Printing Office (NPO) or the APO Production Unit.

Source: House of Representatives

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