BIR orders new tax stamps on all cigarettes, e-cigs as stamp costs still hanging

MANILA, Philippines—The Bureau of Internal Revenue (BIR) has ordered new tax stamps affixed on all cigarettes, e-cigarettes and vapes despite still unresolved issues in the stamp cost to be borne by traders.

Internal Revenue Commissioner Caesar Dulay and Finance Secretary Carlos Dominguez III issued Revenue Regulations (RR) No. 18-2021 published on Tuesday (Sept. 14), which consolidated the rules on internal revenue stamps affixed on all imported and locally produced tobacco, heated tobacco and vapor products for both domestic sale or exports.

Products with tax stamps meant the correct excise had been paid by manufacturers and importers prior to sale.

The BIR was currently implementing the enhanced internal revenue stamp integrated system (Irsis), which upgraded to a web-based application its information system managing the ordering, production, distribution, affixing, monitoring as well as tracking of cigarette tax stamps.

Being implemented since March, the enhanced Irsis was meant to be “an effective means of preventing the proliferation of illicit trade of tobacco products,” the BIR had said.

But Deputy Commissioner Arnel Guballa told the Inquirer on Tuesday that the BIR was still settling issues on cost of the new tax stamps to be churned out by state-run APO Production Unit Inc.

Under RR 18-2021, tax stamps will cost 20 centavos a piece, to be shouldered by importers and manufacturers. But Guballa said this was still “undergoing review.”

The industry group Philippine Tobacco Institute (PTI) early this year opposed APO’s plan to jack up the cigarette tax stamp cost from 15 centavos at present, alleging that the government printer wanted only to double its profit.

The last price adjustment was made in 2018, from 13 centavos per stamp when the Irsis project started in 2014 to collect correct excise from cigarettes.

PTI, which groups domestic cigarette makers, exporters and tobacco leaf suppliers, had sought a “reasonable” two-centavo increase in the price of new cigarette tax stamps.

In the past, unscrupulous traders had been able to churn out fake stamps, resulting in foregone revenues for the government. The BIR responded by designing new and improved stamps with more security features in order to prevent counterfeiting.

RR 18-2021 mandated prior payments of excise before manufacturers and importers can order tax stamps.

Under Republic Act (RA) No. 11346 or the Tobacco Tax Law of 2019, cigarette excise rose to P50 per pack effective Jan. 1, 2021, from P45 a pack in 2020.

For e-cigarettes, RA 11467 signed by President Rodrigo Duterte in 2020 slapped P27.50 per pack of excise on heated tobacco products this year, from P25 a pack in 2020.

Also under RA 11467, the excise rate on conventional freebase vapor products increased to P50 per milliliter in 2021, from 2020’s P45 per ml.

As for salt nicotine vapes, the levy also rose to P42 per ml from P37 per ml, under RA 11467.

TSB