Philippine BIR Plans to Expand QR Codes on Goods

Regulations by 2FIRSTS.ai
Jun.17.2024
Philippine BIR Plans to Expand QR Codes on Goods
Philippine Bureau of Internal Revenue (BIR) plans to expand QR codes to e-cigarettes, alcohol, and sugary drinks to boost tax compliance.

According to a report from Business Mirror on June 16th, the Philippine Bureau of Internal Revenue (BIR) plans to expand the use of QR codes to products such as e-cigarettes, alcoholic beverages, and sugary drinks. BIR Assistant Commissioner Jethro M. Sabaria stated that the agency plans to transition from a stamp-based system to a digital tracking system starting in the second half of 2025, beginning with tobacco products.

 

Sebraca also revealed that the domestic tax stamps affixed to cigarettes and e-cigarette products to ensure tax compliance are merely a temporary solution by the government, as they have already signed contracts with the tax stamp provider.

 

This is just a simple QR system that can only hold a limited amount of data for consumers to verify the legitimacy of the product's source.

 

The digital system will be implemented in stages, starting with tobacco products. "Sin products" such as tobacco, alcohol, sugary beverages, and e-cigarettes will gradually adopt this digital system, with one item being implemented on average every six months. Sabracard stated that this is a pay-as-you-go system, where an additional fee will be added to each purchased product, ultimately passed on to the consumer.

 

He emphasized that the QR code system is a public-private partnership (PPP) project, and the government will only inherit this system after six to twelve years or when the contract terminates. Unlike the tax ticket system where the government only collects data, the QR code system allows the government to inherit and further enhance the system, addressing any issues that may arise during the market operation period.

 

According to Seb Laka, with these measures in place, producers of "sinful goods" will ensure that their products must undergo BIR approval before being marketed. However, he did not estimate how much this action will contribute to BIR's tax revenue. He stated that if consumers have trust in the products they purchase, tax revenues will increase.

 

Sibelak stressed the importance of government focusing on the implementation of their policies to prevent harm to the public or damage to public health.

 

The primary goal of imposing a consumption tax is to curb consumption. Therefore, you should not expect to see an increase in tax revenue.

 

In 2023, the BIR's consumption tax revenue was 2916.61 billion pesos ($49 billion), which was 12.95% lower than its target of 3350.4 billion pesos ($57 billion).

 

Saiblaca stated that due to changes in consumption habits among Filipinos, the gap between BIR's consumption tax revenue for this year and its target revenue may further widen.

 

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