The Bureau of Internal Revenue (BIR) will start affixing tax stamps on e-cigarettes and heated tobacco products (HTP) to ensure tax compliance among manufacturers of these alternatives to traditional smoking.
Based on BIR Revenue Regulations No. 28 dated Sept. 10, 2021, the Department of Finance (DOF) approved the expansion of the Internal Revenue Stamp Integrated System or “Enhanced IRSIS” by including HTP and e-cigarette or vapor products.
According to the RR signed by BIR Commissioner Caesar R. Dulay and Finance Secretary Carlos G. Dominguez III, the mandatory affixture of tax stamps will cover both imported and locally manufactured HTP and vapes.
The BIR said that manufacturers, whether importers or local producers, should enroll and register with the tax bureau’s “Enhanced IRSIS.”
“The orders for the new internal revenue stamps prescribed herein may be submitted for approval by the BIR not later than fifteen (15) calendar days before the effectivity of these Regulations,” the BIR said.
“No later than October 1, 2021, all locally manufactured packs/cartons of cigarettes, heated tobacco products, and vapor products shall be affixed with the new internal revenue stamps prescribed by these Regulations,” the bureau added.
With respect to imported, the BIR said that no importation and subsequent release of these excisable products from the Bureau of the Customs shall be allowed unless the new internal revenue stamps shall have been affixed effective January 1, 2022.
“Effective January 1, 2022, all cigarettes, heated tobacco products, and vapor products manufactured in the Philippines and/or imported into the Philippines shall be affixed with the said stamps,” the BIR said.
Meanwhile, the BIR and DOF approved the increase in the price of tax stamps from 15 centavos to 20 centavos apiece, which will be paid by the importers and manufacturers to the state-run APO Production Unit Inc. (APO).
The approved cost, however, is lower than APO’s earlier proposal of 23 centavos per tax stamp.
To recall, the Philippine Tobacco Institute (PTI) had opposed last March the planned increase in the price of IRSIS stamps, saying it was “unconscionable and excessive.”
“We wish to emphasize that the intent for the internal revenue stamp is to ensure the collection of excise taxes,” said PTI, an association of local cigarette manufacturers, exporters, and leaf suppliers in the tobacco industry.
PTI added that APO is not a revenue-generating government agency and its “monopoly” of producing the tax stamps is for regulatory purposes and not to raise revenues.