British American Tobacco asserted that it will not pay the higher excise tax rate of PHP 26.06 (US$ 0.61) per pack.

The company criticized the Bureau of Internal Revenue (BIR) for not allowing its local partner, La Suerte Cigar & Cigarette, to withdraw cigarettes from the factory at a lower tax rate of PHP 6.74 per pack (US$ 0.16).
BAT and La Suerte had earlier asked the BIR to allow the withdrawal of Pall Mall cigarettes from their factory at a lower tax rate to replenish their inventory in the market.
In a statement, BIR Commissioner Lilian Hefti said that La Suerte could withdraw the cigarettes anytime it wants provided the company pays the excise tax at the PHP 26.06 rate prescribed in the agency's ruling dated 22 February 2007.
"In the event that the BIR ruling is reversed with finality and a lower excise tax classification is made to apply, then any excess taxes paid by La Suerte may be claimed for refund or credit," Hefti said.
An official said earlier that the company is unwilling to "pay under protest" just so it can replenish the market, citing the difficulty of getting a refund from the BIR.
BAT general manager Jeremy Flint stressed that the company has not agreed to pay the P 26.06 per pack excise tax rate earlier slapped by the BIR.
"We have strongly protested the BIR decision to insist on the implementation of the 22 February 2007 ruling of former Commissioner Jose Mario Buñag that has been clearly superseded by the Department of Finance (DOF) decision on 24 July 2007," Flint said.
On 22 February, the BIR had slapped the higher tax rate on Pall Mall as the brand was previously sold in duty-free shops.
On 24 July, finance undersecretary Gaudencio Mendoza Jr, reversed the BIR ruling and classified Pall Mall as a mid-price brand subject to a lower excise tax of PHP 6.74 a pack after BAT and La Suerte asked to review the classification of the brand. (sra)