The Philippine Tobacco Institute (PTI) has opposed the plan of state-run APO Production Unit Inc. to hike the printing cost of cigarette tax stamps to 23 centavos, the organization said in a statement over the weekend.
In a letter to Michael Dalumpines, APO chairman and president, dated March 15, 2021, Rodolfo Salanga, PTI president, decried the proposed increase, from the current 15 centavos, as “unconscionable and excessive” further stressing that APO is not a revenue-generating government agency and its “monopoly” of producing the tax stamps is for regulatory purposes and not to raise revenues.
PTI, which is an association of local cigarette manufacturers, exporters and leaf suppliers in the tobacco industry, said with the proposal, APO will make a 102 percent profit.
“APO, however, could not justify its reason to increase the price which is allegedly due to higher cost of ink and paper to produce the security stamps,” PTI said.
“In view of the foregoing, we believe that the eight centavos printing cost increase from the current 15 centavos per internal revenue stamp to the proposed 23 centavos is unconscionable and excessive. We wish to emphasize that the intent for the internal revenue stamp is to ensure the collection of excise taxes. APO should not opportunistically use such requirement to collect internal revenue stamp printing cost with a target of more than 102 percent net profit of its actual cost,” PTI wrote.
PTI said it is amenable to a two-centavo increase per stamp on the current 15 centavos and would still give APO a net profit from its actual cost of a little over 11 centavos. The group said the last increase in 2018 was also two centavos from the initial price of 13 centavos in 2014.
PTI added APO should not implement any increase without the Bureau of Internal Revenue (BIR) issuing first a revenue regulation to adjust the price.
APO is a government-run printing office tapped by the BIR to run the Internal Revenue Stamps Integrated System project or the security tax stamps on cigarettes.
The project was rolled out in September 2014 to monitor the supply and sale of tobacco products and guarantee payment of excise taxes by manufacturers.