Connect with us

Hi, what are you looking for?

Economy

BIR sets floor price for tobacco, vapor products

THE BUREAU of Internal Revenue (BIR) issued guidelines on how to determine the floor price for cigarettes, as well as heated and vapor tobacco products.

Revenue Regulations No. 7-2021 serves as the implementing rules and regulations for Republic Act (RA) 11346 that increased the excise taxes on so-called “sin” products such as tobacco and alcoholic beverages.

Under the guidelines, the agency said the minimum price of cigarette, heated and vapor tobacco products will be computed by adding the total production cost of the cheapest brand per tobacco product, the excise tax and the value-added tax (VAT).

The BIR determined the reference rates for taxation purposes in case there are no documents available on the actual price of the product.

For instance, a floor price of P78.40 will be imposed for cigarettes with production cost of P20, excise tax of P50 and VAT of P8.40.

Heated tobacco products with a P20 production cost, P42 in excise tax and P7.44 in VAT should have a minimum price of P69.44.

For vapor products, the BIR said 0.7 milliliter (ml) pod of nicotine salts will have P125.44 as floor price this year — given its P70 production cost, P42 in excise tax and P13.44 in VAT. A nicotine salt of 2.5 ml will have P421.12 as a minimum price, while a 4-pod item has P2,195.20.

The floor price for 10-ml tank of freebase nicotine with a production cost of P50 each, P50 in excise tax and P12 in VAT, was estimated at P112, while a larger tank with 25 ml has a P308 minimum price.

“The ELTRD (Excise Large Taxpayer Regulatory Division) shall establish a monthly data profile based on the required periodic manufacturer’s or importer’s sworn declaration for all brands per tobacco product category,” the BIR said.

For those caught selling tobacco and vapor products below the floor price will face penalties from P200,000 to P500,000, or worth 10 times the amount of excise tax and VAT due. Sanctions also include 4-6 years of imprisonment.

“Any person who sells tobacco products including heated tobacco products and vapor products at a price lower than (the floor price) shall be punished with a fine of not less than 10 times the amount of excise tax plus VAT due but not less than P200,000, nor more than P500,000, and imprisonment of not less than 4 years,” it added.

The BIR also imposed inspection fees — 50 centavos per 1,000 pieces of cigars, 10 centavos per 1,000 sticks of cigarettes, and 10 centavos for 1,000 units of heated tobacco products. Meanwhile, one centavo of inspection fee was set per ml of vapor product, two centavos per kilo of whole leaf tobacco and three centavos per kilo of tobacco scraps.

To signify that excise taxes have been paid, the BIR said tax stamps should be attached on the packaging of these “sin” products.

Those who will affix previously used tax stamps, erase cancellation marks or make any alterations on the stamps will have to pay a fine of least P10 million and up to P500 million, with imprisonment of 5-8 years. Selling and using fake stamps will also face similar charges, according to the bureau.

The IRR was signed by BIR Commissioner Caesar R. Dulay and Finance Secretary Carlos G. Dominguez III on May 18 but the document was only published on Wednesday. The guidelines will take effect early next month or 15 days after its publication.

The Department of Finance expects to collect P297.8 billion from “sin” taxes this year. — Beatrice M. Laforga

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest

Investing

Almost one in five UK workers say they are likely to change jobs in the next 12 months as they seek better pay and...

Investing

Around 57 per cent of van owners feel discouraged from going electric due to a lack of charging points, according to a survey published...

Investing

Business and cycling groups have urged the government to reform its cycle to work scheme so it can be used by lower-paid and self-employed...

Investing

Beer drinkers could soon find it difficult to buy their favourite bottled beverage because of a shortage of glassware triggered by soaring energy costs,...

Economy

  Spotlight is BusinessWorld’s sponsored section that allows advertisers to amplify their brand and connect with BusinessWorld’s audience by enabling them to publish their...

Economy

Notice of Annual Stockholders’ Meeting Notice is hereby given that the Annual Stockholders Meeting will be held on Monday, June 20, 2022 at 8:30...

You May Also Like

Investing

Having a good Instagram marketing agency to back up your Instagram account is an absolute must going into the new year. With competition stronger...

Economy

Ivermectin, an existing drug against parasites including head lice, has had a checkered history when it comes to treating COVID-19. The bulk of studies...

Investing

Insomnia is the most common sleep disorder in the global population. Therefore, it is a problem that many people suffer or have suffered throughout...

Investing

As a traditionally rigid insurance industry becomes bogged down by antiquated processes and operations, a handful of industry leaders are seeking to shake things...

Disclaimer: SmartRetirementReport.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 SmartRetirementReport. All Rights Reserved.