Cigarette makers oppose gov’t printing agency’s plan to raise tax stamp prices
THE PHILIPPINE Tobacco Institute (PTI), an industry lobby group, said it opposed plans by a government printing agency, APO Production Unit, Inc. (APO), to raise the price for tax stamps to 23 centavos from the current 15.
The PTI said in a statement over the weekend that APO will earn excessive profits from the price increase, which the latter blamed on higher ink and paper costs.
The plan to raise prices was disclosed in a series of meetings with the Bureau of Internal Revenue (BIR).
The PTI noted that the actual production cost for a tax stamp is 11.377 centavos, leaving APO a gross profit of 11.623 centavos per stamp.
The planned price hike is “unconscionable and excessive,” since APO is not a revenue-generating agency of the government, PTI President Rodolfo F. Salanga said in a letter to APO Chairman and President Michael J. Dalumpines.
Mr. Salanga said the agency’s monopoly on tax stamps was implemented to ease regulation, and was not intended as a revenue-raising arrangement for the government.
“In view of the foregoing, 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. We wish to emphasize that the intent for the internal revenue stamp is to ensure the collection of excise taxes. APO should not opportunistically use such a requirement to collect internal revenue stamp printing cost with a target of more than 102% (profit relative to) actual cost,” PTI said.
The group said a more acceptable price increase would be two centavos per stamp, as happened in 2014 and 2018.
Cigarette tax stamps indicate that taxes have been collected by the government.
PTI includes major producers like Fortune Tobacco Corp., JTI Philippines, Inc., and PMFTC, Inc.
APO is one of three entities assigned by the government to produce official forms and other sensitive, high-volume printed material.
PTI said it has been raising its concerns with the BIR and APO since December.
BusinessWorld asked APO to comment Sunday but it had not replied at deadline time. — Beatrice M. Laforga