THE Bureau of Internal Revenue (BIR) is seeking to lower the additional cost that cigarette and alcohol product
manufacturers are seen to incur should the government accept the touted smuggling-proof track-and-trace technology offered by a Swiss company.

The goal, Internal Revenue

Deputy Commissioner Lilia Guillermo said on Wednesday, is to cut Sicpa Product SA’s 50-centavo cost of stamps offer down to the least possible level.

 Under the Sicpa unsolicited offer, it will cost cigarette and alcohol manufacturers an extra 50 centavos to affix electronic stamps to excisable products, enabling the government to count the volume coming out of the factories and demand the right taxes for these.

Guillermo said the BIR is set to begin discussions on costs with Sicpa executives this Saturday when a team of Swiss businessmen will arrive.

The meeting, she said, is important in that cigarette manufacturers have balked at the prospect of having to pay for more than they are prepared to do so, just to accommodate the BIR.

 “We have received the Neda endorsement. Negotiations will now take place,” Guillermo, who heads the BIR Information Systems Group, said. “We’ll try to renegotiate the project cost. It could still be lowered,” she quickly added.

Once in place, the touted tamper-proof stamp-tax technology from Switzerland is seen to boost additional excise tax collections worth P13.3 billion a year, according to Sicpa executives.

Guillermo acknowledged the manufacturers could simply pass on the additional burden to consumers, which could dampen demand and hurt the government’s revenue-enhancement efforts as well.
 

As a result, the BIR will seek to “bargain for lower costs overall,” Guillermo said.

Once the discussions on costs are done, the BIR plans to entertain other bids consistent with the Swiss challenge format of the agreement where the lead bid entity can always be outmaneuvered by a competitor.

“We will do the Swiss challenge next,” she said.