Business
BIR shelves negotiation with SICPA
By
Mar 8, 2010 - 4:53:20 AM

MANILA, March 8 (PNA) --The Bureau of Internal Revenue (BIR) has sought a legal opinion of the Department of Justice (DOJ) concerning a House resolution directing the agency to stop negotiating with SICPA Security Products SA for securing excise taxes paid on locally manufactured cigarettes and liquor.

The BIR temporarily stopped negotiating with SICPA Security until the Justice department issues an opinion.

BIR Deputy Commissioner Lilia Guillermo bared this on Friday at the sidelines of the World Bank supported International Tax Dialogue held at the Manila Peninsula Hotel.

Guillermo said the negotiation panel bowed to the wishes of the House of Representatives who recently issued a resolution asking the BIR to cease all talks with SICPA negotiators.

The temporary suspension and its uncertain re-launch put to doubt whether government would again be forced to incur deficits till at least 2013.

The agency wants to determine if it has legal footing in pursuing the collection of incremental excise revenues amounting P60 billion to P70 billion a year.

“We have been stopped by Congress and that is why we have sought legal opinion from the Department of Justice,” Guillermo told reporters.

According to her, all negotiations with SICPA officials had been put on hold till after the DOJ, whose head, Agnes Devanadera has resigned to seek an elective position, has issued an opinion.

“We want to stay legal and aboveboard,” Guillermo said, adding that "no matter that under parliamentary rules the House resolution needs a counterpart Senate resolution to take effect."

She said negotiations would resume most likely after the national elections in May when a new Justice Secretary should have been appointed.

Guillermo heads the negotiating team seeking to reduce the cost of implementing the unsolicited SICPA proposal plugging excise tax leaks totaling hundreds of billions of pesos each year.

She said she had advice from government lawyers, including that from Finance Undersecretary Estela Sales, who is also a lawyer, to proceed only after the DOJ opinion had been given.

BIR chief Joel Tan-Torres previously said SICPA agreed to cut the cost of its supposedly tamper-proof excise tax system by 20 to 30 centavos instead of the original 50 centavos.

Congressmen balked at the thought of having consumers pay the cost of the Swiss technology, knowing that manufacturers will simply pass on the burden. (PNA)
RMA/Jun Vallecera/rsm