Tobacco.org

Cigarette stamps proposal not a done deal - Teves  

The proposal of Swiss firm SICPA Product Security SA to provide security stamps on cigarettes is not a done deal, Finance Secretary Margarito Teves said yesterday, assuring lawmakers that there was nothing final yet.

"It must be clarified that the SICPA (proposal) is merely an unsolicited proposal under the BOT (Build-Operate-Transfer) Law. It's not a done deal yet," Teves said.

He said that even if the Bureau of Internal Revenue (BIR) is already in negotiations with SICPA for its stamp-tax technology project, it would still be sent back to the National Economic and Development Authority (NEDA) for its board approval and subsequently, be subjected to a "Swiss Challenge."

"Processes must be observed before a decision on SICPA is made," he told reporters yesterday.

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EDITORIAL: Remember ‘blue seal’ cigarettes  

A SWISS company is proposing to put in place a system where tax stamps will be affixed on every pack of cigarette and every bottle of liquor to raise more revenues for the government.

The company, SICPA, wants to make it appear affixing stamps on highly taxable goods is a fool-proof way of curbing smuggling and tax evasion by manufacturers. The reality is that it is selling a fraudulent bill of goods.

It’s only about 20 years now that cigarettes and liquor have been free of the green BIR stamp on every pack . . .

SICPA claims its stamps cannot be counterfeited. In this land of fake peso bills, diplomas, passports and even visas, does SICPA really want us to believe its stamps could not be faked? Even a reasonable facsimile would do as in the previous experience with BIR stamps. The BIR stamps, it will be recalled, were also printed in security paper with watermark. A close look at the genuine BIR stamps and the fakes would show which was which. But to repeat, this did not discourage the smugglers.

But the biggest objection to the SICPA proposal is that it will raise prices by an estimated P1.50 a pack, a cost that will be passed on to consumers. Out of that P1.50, about P1 will go to the government and P0.50 to SICPA.

Given that kind of sharing, why does not the government simply increase the specific tax on cigarettes across-the-board by P1 a pack? The government collects the same revenues. The consumer gets a P0.50 break.

The only loser would be SICPA and, presumably, its sponsors who are ramming the proposal down the throat of the BIR.

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SICPA not a done deal, Teves tells solons  

Finance secretary Margarito Teves yesterday assured lawmakers that there is nothing final in the ongoing negotiations of the Bureau of Internal Revenue (BIR) with Swiss firm SICPA Product Security SA, stressing that a "process" has to be observed.

"It must be clarified that the SICPA (proposal) is merely an unsolicited proposal under the BOT (Build-Operate-Transfer) law. It’s not a done deal yet," Teves said.

He said even if the BIR wraps up its negotiations with SICPA for the latter’s stamp-tax technology project, the proposal would still be sent back to the National Economic Development Authority (NEDA) for board approval and subsequently be subjected to a Swiss Challenge.

"Processes must be observed before a decision on SICPA is made," he said. "It must be first accepted, approved and go through some more processes like getting NEDA board approval."

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GMA allies buck SICPA plan  

President Arroyo’s allies at the House yesterday opposed the “tamper proof” strip stamps on every pack of cigarette and bottle of liquor proposed by Switzerland-based SICPA Product Security SA, saying it amounts to the imposition of additional taxes.

The congressmen, during a briefing of the House committee on ways and means conducted by SICPA officials, also expressed doubts over the project’s viability considering that it would cost the government close to P18 billion.

Rep. Mauricio Domogan (Lakas-Kampi CMD, Baguio) said BIR would violate the Constitution if it signs the SICPA contract.

“Whether you like it or not, this is a form of taxation. Adding cost to be passed on to consumers, to me, is just another form of taxation which I don’t think can be done by the mere signing of a contract,” he said.

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Solons wary of plan to hike cigarette taxes 

A plan that would effectively hike cigarette prices yet possibly fail to boost government revenues was questioned by members of the House of Representatives on Tuesday.

The Bureau of Internal Revenue plans to add revenue stamps to cigarette packs to improve inventory monitoring and tracking of the tobacco products from factories to retail outlets in order to minimize tax leakages and boost revenues by P13 billion.

The government has endorsed the BIR's plan which would use revenue stamps provided by Swiss-based SICPA Product Security Inc.

During a hearing of the House ways and means committee, former BIR commissioner and incumbent Camarines Sur Rep. Liwayway Vinzons-Chato said that based on research conducted by her staff, the revenue stamps being pushed by SICPA showed "no clear indication as to an increase in tax collection and [minimizing] so-called leakages.''

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Solons warn BIR vs tax stamps on sin products 

LEGISLATORS on Tuesday warned the Bureau of Internal Revenue (BIR) against signing the P18-billion revenue-stamp contract with a leading global provider of security ink and solutions for the authentication of bank notes, value documents and products, saying the proposal could trigger the imposition of additional taxes on the public.

At the hearing of the House ways and means committee on Tuesday, legislators also questioned the contract cost that increased from P13 billion to P18 billion in a matter of three years since the proposal was first submitted to the BIR.

Sicpa Products Security SA Director Hans Schwab blamed inflation for the P5 billion cost adjustment from 2006 to 2009.

Liberal Party Rep. Liwayway Vinzons-Chato of Camarines Sur aired strong misgivings about Sicpa’s claim that the revenue-stamp technology they are offering would address “illicit” cigarette trade that has cost the government several billions of pesos in unrealized revenues.

Chato recalled that during her term as internal-revenue commissioner, she sent a team of experts to the United States to study the fuson stamp system as a means of determining taxes on cigarette products.

“The group did not recommend the attachment of fuson on stamps because there was no clear indication as to increase in collection in taxes and so-called leakages,” Chato said.

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Lawmakers close hearings on cigarette tax stamp issue  

The Bureau of Internal Revenue's plan to provide security stamps on cigarette packs faced another setback as lawmakers yesterday shelved discussions on the controversial tax stamp system on cigarette packaging proposed by Switzerland-based Sicpa Product Security SA (SICPA).

Members of the House committee on ways and means led by Rep. Exequiel Javier (Lone District, Antique) said the project would only mean additional costs to consumers.

As such, the panel approved the motion of Rep. Victor Ortega (1st District, La Union) to close the hearings. The committee also asked the Inter-Agency Investment Coordination Committee  (IICC) and the National Economic Development Authority (NEDA), the ICC's secretariat to provide the panel with a report on their decisions allowing the BIR to pursue negotiations with Sicpa.

NEDA earlier gave the BIR the green light to pursue negotiations with SICPA after it reviewed the Swiss company's proposal. The BIR had submitted the proposal to NEDA for review.

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ROCES: Tobacco and the Philippines  

For better or worse (health wise and economically-speaking somewhat), the Philippines has had a long affair with the tobacco plant. Today, the negative health effects of tobacco and cigarette smoking are well understood; so we hope that the affair is finally coming to an end. Beyond personal health, cigarettes pose a public health and garbage problem. Each day we lose count of how many people we see tossing their cigarettes on the streets and sidewalks: out of car windows, over their shoulder and right in front of other people. People would never indiscriminately litter in their own homes, but almost feel compelled to in public spaces. A health risk is also posed by second hand smoke. . . .

Our historical relationship with tobacco began in the late 1500s; it was one of the first plants exported to our shores by the Spanish empire. The goal was to turn the Philippines into a tobacco producing nation. The tobacco plant had a special affinity for our soil and took root quickly. Among the native population smoking tobacco quickly became a status symbol . . .

tobacco use among youth in the Philippines indicate that smoking is on the rise. The government has passed the Tobacco Control Act in 2003, but more needs to be done.

What we recommend are developing targeted publicity and anti-smoking campaigns focusing on the youth. The goal should be to educate people on the dangers of smoking. In the Philippines, we have not seen such a high-profile campaign mounted. The rising number of youths smoking demonstrates that the health risks of smoking are not being effectively taught. Youth-oriented campaigns have proven effective in other countries and should be emulated here. The benefits of reducing smoking in the Philippines will be found in public health, garbage and even beautifying our cities and streets.

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Davao City smoking ban gains world recognition 

The city government's stiff campaign against smoking here has gained global recognition for its commitment to promote smoke-free policies.

This, as the Global Smoke-free Partnership (GSP) recently announced its winners for this year, with the Davao City Anti-Smoking Task Force winning in the governmental body category.

In a statement sent to Manila Bulletin on Thursday through fax, GSP said the city's anti-smoking task force came out on top for its "exceptional leadership and commitment to further smoke-free policies by a governmental agency."

GSP is an international organization formed to promote effective smoke-free air policies worldwide. The partnership is a fusion of American Cancer Society and the Framework Convention Alliance to bring the World Hearth Federation and International Union Against Cancer and other organizations to advocate for and reinforce anti-tobacco policies.

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Schweitzer-Mauduit Announces Common Stock Offering 

Schweitzer-Mauduit International, Inc. (NYSE: SWM) ("Schweitzer-Mauduit" or "the company") today announced that it plans to publicly offer 1.8 million shares of its common stock in an underwritten offering. In addition, the company intends to grant the underwriters a 30-day option to purchase up to an additional 15% of shares sold. Goldman, Sachs & Co. is serving as the sole book-running manager for the offering. Co-managers for the offering include SunTrust Robinson Humphrey Inc., Davenport & Company LLC and Oppenheimer & Co. Inc.

The company intends to use the net proceeds from the offering for general corporate purposes, including the company's planned funding of the construction and working capital needs of a new Reconstituted Tobacco Leaf (RTL) facility in the Philippines and a potential equity contribution for an RTL joint venture in China.

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• Congressmen buck SICPA deal  

Congressional leaders yesterday slammed the deal for a stamp tax technology on cigarettes and alcohol products being worked out between the Switzerland-based SICPA Product Security SA (SICPA) and the Bureau of Internal Revenue (BIR), saying it is heavily in favor of the Swiss proponent.

Antique Rep. Exequiel Javier, House ways and means chair, also said the BIR could not implement the SICPA proposal through the build-operate-transfer (BOT) scheme without the approval of Congress.

"If it’s a straight regular BOT system, then there’s no need for approval of Congress. But here, there’s a variation of the BOT which needs Congress’ imprimatur," Javier said during a briefing given by the BIR on the SICPA proposal.

He stressed the SICPA contract essentially involves raising revenues, which is the sole prerogative of Congress.

"You cannot raise revenues without Congress’ approval. Aside from the excise taxes that you’re collecting, you’ll be raising revenues. You cannot do it through the BOT," Javier said.

He also rejected claims that the Swiss firm’s tamper-proof stamp-tax technology called SICPATRACE System is "necessary" in combating smuggling and monitoring product withdrawals.

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Scheme to boost monitoring of cigarette firms’ tax payments to start in 1st half 2010 

IMPLEMENTATION of a project designed to boost the monitoring of cigarette firms’ tax payments is targeted to start in the first half of next year.

In a briefing for the House of Representatives ways and means committee yesterday, Bureau of Internal Revenue (BIR) Deputy Commissioner for Information Systems Lilia C. Guillermo said that the project, which was proposed by Swiss project developer SICPA Product Security SA in October 2007, will be subjected to Swiss challenge next month.

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Cigarette makers buck SICPA proposal  

Cigarette manufacturers opposed yesterday the $300-million proposal of Swiss firm SICPA Product Security SA to affix a high-tech, tamper-proof strip stamps on every pack of locally made cigarettes.

Chris Nelson of Philip Morris told the House ways and means committee that the proposal's cost would be borne initially by manufacturers and eventually passed on to consumers.

"This translates to around P.50-P1 increase in cost per pack across the board for all brands - an amount higher than the excise tax increases in 2007, 2009 and 2011 for low, medium and high tax categories," he said.

He said for Philip Morris, the cost of the stamps "translates to around P564 million to P1.1 billion a year."

"For our bigger competitor, Fortune Tobacco, the figure is between P1.6 billion and P3.2 billion a year," he said.

"It is a big blow to companies like ours still reeling from the effects of the global recession. More so the small players," he added.

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• Philippine health NGO slams tobacco expo; warns more tobacco-related deaths among Asians  

MANILA -- Members of the Philippine health NGO Framework Convention on Tobacco Control Alliance Philippines (FCAP) slammed the ongoing conference of the tobacco industry in Bangkok and warned of increase in tobacco-related deaths in Asia as the industry enhances its hold in the Asia Pacific market.

“The tobacco industry is training its guns and armor not for battle but to entice our young children to smoking addiction and lead them to suffer from tobacco-related deaths. Expect the industry to launch more sophisticated marketing and public relation gimmicks to penetrate the Asia Pacific market where governments are starting to implement stricter bans on smoking and tobacco advertising and promotions,” said Dr. Maricar Limpin, FCAP Executive Director. . . .

In the press briefing conducted by the Southeast Asia Tobacco Control Alliance (SEATCA) in Bangkok, FCAP showed to the media Philip Morris Philippines Managing Director Chris Nelson donating check to the Philippine National Red Cross (PNRC) after the typhoons that have hit the country recently.

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• WTO hears RP complaint against Thailand  

The Philippines and Thailand were given a final opportunity until December 7 to comment and respond to questions before the WTO Dispute Settlement Panel is set to issue a ruling early next year over the countries cigarette tax dispute.

Philippine Ambassador to Geneva/WTO Ambassador Manuel AJ Teehankee relayed this in an email after the panel conducted the second substantive meeting last Nov. 4 to 6 in Geneva.

The panel hearing the (DS 371 Philippines versus Thailand on cigarette customs valuation), is chaired by H.E. Ambassador Roberto Acevedo, Permanent Representative of Brazil to the WTO, and its two additional members are Alvaro Hansen of Uruguay and Richard Gottlieb of Canada.

The panel heard rebuttal arguments and fielded searching questions on the facts, claims, and defenses presented by both parties since the first substantive meeting last June.

During the meeting, Teehankee highlighted issues of transparency, discrimination, and domestic protection in Thailand's regulatory regime

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