Tobacco Institute hails Agra stand on SICPA proposal

Cigarette makers commended the Department of Justice for stopping the Bureau of Internal Revenue from pursuing the unsolicited proposal of SICPA Products Security SA. In a statement, they lauded Justice Secretary Alberto Agra for favoring the industry’s objection to the SICPA proposal and directing the Department of Finance and the BIR to stop all talks with the Swiss firm. SICPA proposed to monitor makers of cigarette and alcoholic beverages so that each product that comes out of their factories can be accurately meted with the excise stamp tax. “We commend Secretary Agra on his ruling against SICPA. His opinion is based on solid grounds," Rodolfo Salanga, president of the Philippine Tobacco Institute (PTI), said. “The DOJ opinion is consistent with the report issued by the Ways and Means Committee of the House of Representatives which found the costly tax stamp deal violative of legal requirements and full of anomalies," Salanga added. The SICPA proposal would have cost the government P18 billion – money it could hardly afford given the extent of its anticipated budgetary shortfall of some P300 billion this year, he said. “The justice department is obviously working overtime to address the backlog of cases pending in their department for resolution. We were deeply worried on the possible outcome of this case as the BIR claims it is confident of securing a favorable opinion. Thus, the final opinion issued by the DOJ is a welcome development," Salanga said. Agra had said the BIR could not pursue the SICPA proposal because the transaction partakes the nature of legislation for which the Constitution bars the agency from making. Only the House of Representatives has the power to initiate tax measures. Lawmakers such as House ways and means committee chairman Rep. Exequiel Javier of Antique have maintained the SICPA-BIR deal was in reality “a revenue raising measure, an act which obviously is not within the ambit of its powers." The SICPA System pertains to taxation and is legislative in nature. It could not be imposed by the BIR without encroaching upon the exclusive authority of Congress to enact revenue measures, the legislator said. —VS, GMANews.TV