Philippine Bureau of Internal Revenue introduces new rules
The Philippine Bureau of Internal Revenue (BIR), under a new rule, has strictly prohibited the sale of e-cigarettes, tobacco, and heated cigarettes at prices lower than the minimum price set by the tax authority. Violators will face fines and imprisonment, the BIR said, adding that the new rules are aimed at ensuring tax compliance and cracking down on low-cost sales.
The Philippine Bureau of Internal Revenue (BIR) now strictly prohibits the sale of e-cigarettes, tobacco, and heated cigarettes at prices lower than the minimum price set by the tax authority, which sets the combined excise tax and value-added tax. GMA Integrated News reported on September 18th.
Vapes and tobacco products must not be sold below the official minimum price
On September 16, BIR Director Romeo Lumagui Jr. Revenue Act No. 16 of 2024 was released (RR No. 16-2024) with the latest floor price updates for tobacco, vapes, and heated cigarette products.
Lumagwe reminded online businesses, retailers, and distributors of cigarette products that they face criminal liability if they sell such products at prices below the prescribed reserve price. He emphasized that selling such products at prices below the reserve price “is a criminal offense and businesses will be sentenced to jail.”
- “We are monitoring online platforms and offline stores. Do not sell items for less than the reserve price and promptly remove all posts and products below the reserve price.”
Below are the latest prices published in the Revenue Act No. 16 of 2024 (RR No. 16-2024):
Section 145 (C) of the National Internal Revenue Code (NIRC), as amended, prohibits the sale of cigarette products at a price lower than the combined excise and VAT price prescribed by law, the BIR said.
It added that businesses that sell cigarette goods at a price lower than the stipulated reserve price. “Shall be subject to a fine of not less than ten (10) times the total combined excise and value-added tax, but not less than two hundred thousand pesos (about $3,600) and not more than five hundred thousand pesos (about $9,000) and imprisonment for not less than four (4) years and not more than six (6) years.”
- “Section 263(A) of the Revised Internal Revenue Code of the State also provides that any person who sells heated cigarette products and atomized products at a price less than the combined excise tax and value-added tax shall be subject to a fine of ten times, but not less than, two hundred thousand pesos (approximately $3,600) and imprisonment for a term of not less than four (4) years and not more than six (6) years.”
