MANILA, Philippines -- A lawmaker from the tobacco-producing province of Ilocos Sur wants the Bureau of Internal Revenue not to subject to a Swiss challenge an unsolicited proposal for its P18 billion tax stamp contract for cigarettes.

Deputy Speaker Eric Singson told reporters the BIR should not entertain any other bids for the cigarette tax stamp project offered by the Lausanne-based Sicpa Product Security Inc. because of the Swiss firm’s undue advantage over prospective bidders.

“The Swiss company has its own security feature on the tax stamps that cannot be duplicated by any other firm. Anybody who will challenge will lose,’’ said Singson.

Sicpa has made an unsolicited offer to provide the government with a tax stamping technology that would prevent leakages in revenue collections from cigarettes.

Under local regulations, however, unsolicited proposals under the build-operate-transfer system and its variants will still be subject to a Swiss challenge.

Under the Swiss challenge, a government agency which has received an unsolicited bid for a public project or services to be provided to government is required to publish the bid and invite third parties to match or exceed the unsolicited proposal.”

But the original proponent will have the right to match the best proposal submitted by challengers.

BIR Commissioner Joel Tan-Torres said at least four foreign firms have sounded off their plans to participate in the Swiss challenge.

Singson said the House ways and means committee has not finalized its probe on the tax stamp project of Sicpa due to concerns that it was overpriced and ineffective in tracking and monitoring tax payments of cigarette makers.

The Swiss challenge is meant as a check-and-balance against excessive project pricing.

“We have asked BIR to put everything on hold while the legislative inquiry is still on-going,” said Singson.

A key issue in the stamp tax is whether the BIR could legally impose a 52-centavo additional tax per cigarette pack to cover for the Sicpa tax stamps without getting legislation.

"We consider this additional levy as a form of taxation and there should be a law to make this legal before it can be implemented,’’ said Singson.