Cigarettes, e-cigarettes, vapes and alcoholic drinks will again be more expensive as another round of excise tax hikes takes effect this year while the government eyes to jack up collections from these “sin” products amid a pandemic-induced decline.
Under Republic Act No. 11346 or the Tobacco Tax Law of 2019, cigarette excise will rise to P50 per pack effective on Jan. 1, 2021, from P45 a pack last year.
For e-cigarettes, RA No. 11467 signed by President Duterte last year will impose an excise tax of P27.50 for every pack of heated tobacco products in 2021, from P25 a pack in 2020.
Also under RA 11467, the excise tax rate on conventional freebase vapor products will also rise to P50 per milliliter, from P45 per ml last year.
For salt nicotine vapes, the rate will increase to P42 per ml from last year’s P37 per ml.
As for distilled spirits, the excise tax will climb to P47 per proof liter, from P42 per proof liter in 2020.
Fermented liquors will also be slapped a higher excise of P37 per liter in 2021 from P35 per liter last year.
For better collection and to fight illicit trade, the Bureau of Internal Revenue (BIR) is coming out with new tax stamps or “enhanced Internal Revenue Stamps Integrated System,” which will still be churned out by the state-run APO Production Unit.
BIR officials had said these upcoming stamps would have new security features, as previous tax stamps could be faked, resulting in foregone revenues for the government.
Alcoholic drinks and e-cigarettes will also soon be affixed with internal revenue stamps.
Trading of fake and smuggled cigarettes flourished amid the pandemic especially when supply dwindled during the stringent lockdown that restricted movement of nonessential goods. Affected by the recession, consumers also turned to cheaper alternatives.
From January to September 2020, excise tax collections from tobacco, e-cigarettes and alcohol fell to P166.5 billion from P180 billion a year ago.