INTERNAL Revenue Commissioner Kim Henares is set to bid out the stamp-security system for the country’s tobacco products in the first half of 2012, a process that has been in the pipeline for several years.

Henares said there are about five foreign players interested in the project, but the Bureau of Internal Revenue (BIR) may limit the bidders to those who are not in the business of manufacturing tobacco products.

PMFTC Corp., the combined company of Philip Morris Fortune and Tobacco Corp., earlier offered to shoulder the cost of the stamp-tax scheme on tobacco products using its own technology.

Henares said the agency is still in the process of formulating the terms of reference (TOR) that would govern the eligibility of an interested party on its planned acquisition of a technology that would ensure the right tax for every pack of cigarette.

“The TOR, the bidding and the award [of the contract] will take place within the first half of the year,” Henares told reporters. “We will do a straight procurement via public bidding. No more negotiated sale.”

Henares said the BIR would award the contract based on the technology the company will introduce, security features of the stamp and the lowest cost for the government.

In the previous administration, the Swiss firm Sicpa Products Security SA made an unsolicited bid for the security-stamp tax that would be attached to every cigarette pack sold in the country to monitor the excise taxes collected on cigarettes.

The government turned down the offer because of questions on the legality of the contract and the costs of the proposed technology.

Canada, Morocco and Venezuela all use the Sicpa stamp-tax technology for monitoring and tracking their tobacco products.

PFMTC corners at least 90 percent of the market.

But Henares said that allowing a tobacco manufacturer to monitor its own produce might raise a conflict-of-interest issue.

The China-based conglomerate Huagong Tech Co. Ltd. also submitted a proposal to provide a technology that would curb the smuggling of cigarettes and safeguard revenue collections.

Huagong Tech said it could offer a much-lower cost compared to Sicpa’s 52 centavos and PMFTC’s 10 centavos.

“The bidding would strictly pertain to the technology that will be used on cigarette products. Alcohol products would be next,” Henares said.