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THE
Bureau of Internal Revenue (BIR) has asked
Pall Mall manufacturer La Suerte Cigar and Cigarette Factory to
pay up more or less P20 million in deficiency excise
tax.
Industry
sources said the deficiency covered the period from
October 2004, when the contract manufacturer still
produced the now-phased-out cigarette line, up to
February 2007, when La Suerte made its last production
run of the Pall Mall brand.
Pall
Mall is owned by the British American Tobacco Co. (BAT)
and its local manufacture has been cut following the
government’s decision to classify it as a premium brand,
instead of as a midprice product.
Premium
classification meant paying excise tax of P26.06 per
pack, far more than its suggested retail price of P14
per pack.
BAT
sources confirmed on Wednesday that the Pall Mall line
has been cut, leaving only the continued manufacture of
its Dunhill, Lucky Strike and Slims brands in the
Philippines.
The cut
also meant the withdrawal of a planned $50-million
capacity-expansion program for the Pall Mall brand, BAT
sources said.
According to the sources, BIR chief Lilian Hefti sent a
letter to La Suerte informing the manufacturer of the
need to pay up P20 million in deficiency excise tax, a
deficiency that La Suerte plans to appeal.
This
developed as the
House Ways
and Means Committee chaired by Exequiel B. Javier
recommended the final classification of the Pall Mall
brand at premium level and withdrawal of the government
ruling that Pall Mall should only pay excise of P6.74
per pack. He wants La Suerte assessed for deficiency
excise tax starting from December 2004 and all BIR
rulings on excise tax be made final, without room for
appeal.
The
House committee also recommended that the ambiguities of
Republic Act 9334, or the sin tax law, regarding the
classification of new cigarette brands or variants of
cigarettes, be similarly removed.
Javier
said the power of review exercised by the Secretary of
Finance over the decisions of the commissioner of the
BIR was only inserted in 1998 when Republic Act 8424
became the law.
“The
power of review was a case of a legislative oversight.
Instead of giving a remedy to taxpayers aggrieved from
rulings of the Commissioner of Internal Revenue, it
leads to conflicting and ambiguous interpretations of
the provisions of the National Internal Revenue Code and
related tax laws.
“Moreover, the power of review prolongs the process
through which the aggrieved taxpayers may obtain speedy
relief from adverse rulings of the Commissioner,” Javier
said. |
