Tobacco industry pushes for reasonable cost of tax stamps

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    The Bureau of Internal Revenue (BIR), APO Production Unit Inc. and the tobacco industry will meet today, April 5, to settle the planned hike in the cost of cigarette tax stamps, the Philippine Tobacco Institute (PTI) said in a statement over the weekend.

    Rodolfo Salanga, PTI president, said the industry is for a reasonable hike, as it opposed APO’s plan to raise the cost from the current 15 centavos to 23 centavos, citing that the cost of printing a tax stamp is only 11.37 centavos.

    PTI is standing pat with its position for a two-centavo increase, the same amount with the last increase in 2018 from the initial price of 13 centavos in 2014.

    Salanga pointed out that at the current manufacturers’ cost, APO already has a 30 percent margin. Raising the cost to 23 centavos would effectively give APO a 102 percent net profit.

    “The industry has been battered with annual excise tax increases and production volume is down by half from 120 billion sticks in 2012 to 60 billion sticks last year, thus, hitting us with another blow to raise the cost of the tax stamps, would be too much,” Salanga said.

    He added that the industry has “immensely contributed to the government” and imposing a steep price on the cost of the tax stamp is too much to bear and would only “bleed” the industry further.

    APO is one of three state-run printing agencies and was tapped by BIR to run the Internal Revenue Stamps Integrated System (IRSIS) project or the security tax stamps on cigarettes.

    The IRSIS system monitors the supply and sale of tobacco products and guarantee payment of excise taxes by manufacturers. This was rolled out in September 2014.

    PTI is an association of local cigarette manufacturers, exporters and leaf suppliers in the tobacco industry.