Tobacco group rejects tax stamp price hike
State-run printing firm APO Production Unit Inc. (APO) is planning to increase the cost of cigarette tax stamps, but tobacco players rejected the proposal saying it is “unconscionable and excessive.”
The Philippine Tobacco Institute (PTI) revealed that APO, an agency mandated to print government security-sensitive documents, would raise the price of cigarette tax stamps from the current 15 centavos apiece to 23 centavos.
According to PTI, APO had conducted a series of meetings with cigarette manufactures together with the Bureau of Internal Revenue (BIR) and IRIS Corp. about the proposed increase.
“In one of those meetings, the printing agency presented the actual cost of each tax stamp which is P0.11377, hence with the planned 23 centavos to be paid by manufacturers, APO will gain profit of P0.11623,” PTI said.
Based on PTI estimates, the planned increase would effectively raise APO’s profit to 102 percent.
“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,” PTI said in a statement on Sunday, March 28.
“We wish to emphasize that the intent for the internal revenue stamp is to ensure the collection of excise taxes,” the association of local cigarette manufacturers, exporters and leaf suppliers in the tobacco industry added.
PTI said 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.
Furthermore, PTI said APO should not implement any increase without BIR issuing first a revenue regulation to adjust the price.
PTI already requested the BIR to review APO’s move citing certain government processes were not complied with particularly the absence of a public bidding as provided for by law.
However, PTI said it is amenable to a two-centavo increase per stamp on the current 15 centavos, which would still give APO a net profit from its actual cost of a little over 11 centavos.
The group cited that the last increase in 2018 was also two centavos from the initial price of 13 centavos in 2014.