July 14, 2014

BIR to implement tobacco tax stamp

BusinessWorld today reported that the Bureau of Internal Revenue (BIR) is putting into effect next month its Internal Revenue Stamps Integrated System. The implementing regulations are set to be released this month. Under the system, cigarette manufacturers need to get certification from the BIR that all taxes have been paid before being issued the security stamps that must attached on every pack of cigarette sold.

Our take:This measure has been in the planning for the past two years and its final implementation should help plug revenue leaks. If strictly implemented, this makes it harder for smugglers to avoid paying taxes on their raw material imports.

LT Group (LTG, Not Rated) should benefit from this measure as this will level the playing field in the sector. The company’s tobacco revenues have been eroded by the sale of some competing brands which it alleged to be smuggled. – WealthSec