BUREAUTjFTNTEffiE;NUE

t nl r/\-l
REPUBLIC OF THE PHILIPPINES
DEPARTMENT OF FINANCE HAY ls 2021
BUREAU OF INTERNAL REVENUE I l: 0o e^r
Quezon City
RECOROS UGI. OIVISION
D
?j
May tB, zozt
I

REVENUE REGULATIONS NO. rl- ao:,\

SUBJECT Rules and Regulations lmplementing the Provisions of Republic Act

Nos. tg46 and tt467, Relative to the Excise Tax on Alcohol Products,
Tobacco Products, Heated Tobacco Products, vapor Products and
Disposition of Excise Tax Collection

TO All lnternal Revenue Officials and Others Concerned

SECTION T.SCOPE.

Pursuant to the provisions of Section 244 of NIRC, as amended, the following Regulations
are hereby promulgated to implement the amendment of excise tax on alcohol and
tobacco products, and the imposition of excise tax on heated tobacco products and
vaPor products as provided under Republic Act (RA) No. t:1.46 otherwise known as "An
Act lncreasing the Excise T.ax on Tobacco Products, lmposing Excise Tax on Heated
Tobacco Products and Vapor Products, lncreasing the Penalties for Viotations of
Provisions on Articles Subject to Excise Tax, and Earmarking a Portion of the Total Excise
Tax Collection from Sugar-Sweetened Beverages,.Alcohol, Tobacco, Heated Tobacco and
Vapor Products for Universal Health Care, Amendin g for this Purpose Sections 144, 145,
t46, t47, t52, t64, 26o, z6z,263,265,288, and 289, Repealing Sections 288(B) and 288(C),
and Creating New Sections 263-A, 265-8, and z8B-A of the National lnternal Revenue
Code of ry97, as Amended by Republic Act No. r 0961,, and for other Purposes", as further
amended by RA No. 11467 also known as "An Act Amending Sections t4t, t4z, 14i,, 144,
147,152,26), 263-A,265, and zB8-A, and Adding a New Section z9o-A to Republic Act No.
8424, as Amended, Otherwise Known as the National lnternal Revenue Code of 't9g7, and
For other Purposes", on Sections relevant to excise taxes.

SECTION z. DEFINITION OF TERMS.

1. ALCOHOL PRODUCTS shall refer to fermented liquors, proof spirits, wines,

and/or spirits or distilled spirits, as defined in these Regutations.

2. CIGARETTES -shall mean all rolls of finely-cut leaf tobacco, or any substitute
therefor, wrapped in paper or in any other materiat that are consumed via
combustion of the tobacco.

3, CIGARS. - shall mean all rolls of tobacco or any substitute thereof, wrapped in teaf
tobacco that aie consumed via combustion of the tobacco.

4. CIGARETTES PACKED BY HAND shall refer to the manner of packaging of

cigarette sticks using an individual person's hands and not through any other
means such as a mechanical device or equipment.

\f '
d- pase 1 or 1T
 j. CONTAINER - means any object used for or capable of holding one or more vapor
products or heated tobaSco.products packaging or wrapping.

6. DISTRIBUTOR - refers to any person or entity that distributes or supplies vapor

products or heated tobacco products to retailers and/or other persons and entities
who are not end-users or consumers of vapor products or heated tobacco
products.

l. EXACT REPLICA - refers to the sample printed visual depiction of vapor products
or heated tobacco products packaging submitted by manufacturers and
importers to the Bureau of lnternal Revenue (BlR) pursuant to an application for
registration of new brands or variants of existing brands or new brands in
accordance with Revenue Regulations (RR) No. 3-zoo6 and its amendatory
issuances, which contain the graphic and textual health warnings and other
additional information as required under RA No. t 0643.
8. FERMENTED LIqUORS - such as beer, lager beer, ale, porter and other
fermented
liquors regardless if manufactured in factories or sold and brewed at micro-
breweries or small estublishrnents such as pubs.and restaurants, except tuba, basi,
tapuy and similar fermented liquors.

9. GRAPHIC HEALTH WARNING - refers to the photographic image printed on the

packaging of vapor products or heated tobacco products, which accurately
depicts the hazards of such use and is accompanied by a textual warning related
to the picture as prescribed by the Department of Health ("DOH").
10. GRAPHIC HEALTH WARNTNGS LAW refers to RA No. t 0643, otherwise known as
-
"An Act to Effectively lnstill Health Consciousness Through Graphic Health
Warnings on Tobacco Products".

11. HEATED TOBACCO PRODUCTS - shall refer to tobacco products that may be
consumed through heating tobacco, either electrically or through 'other means
sufficiently to release an aerosol that can be inhaled, without burning or any
combustion of the tobacco. Heated tobacco products include liquid solution and
gels that are part of the product and are heated to generate an aerosol.

12, IMPORTATION shatl reier to the introduction of alcohot products, tobacco

products, heated tobacco products, or vapor products from a foreign country into
the Philippine territory, including duly chartered economic and freeport zones and
duty-free shops, whether for sale or not. lt commences when the carrying vessel
or aircraft enters the Philippine jurisdiction with the intention to unload or keep
for storage therein such product. lt is deemed terminated upon payment of
duties, taxes and other charges due upon the articles, or secured to be paid, at a
port of entry and the legal permit for withdrawal shall have been granted, or in
case said articles are free of duties, laxes and other charges, until they have legally
left the jurisdiction of the Bureau of Customs. For purposes of these Regulations,
any alcohol product, tobacco product, heated tobacco product and vapor product
entering the Philippines through the freeport and special economic zones shall be
deemed to have entered the Philippine customs'territory upon unloading thereof
from the carrying vessel. Bt.iREAt I 0F tt\:rERhrAL REvENl,f E
j-nt iT Ir
tf,' Page 2 of 17
{
RECORDS MGT. DIVISION
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 13. IMPORTER -
refers to any person or entity that is engaged in the importation of
alcohol products, tobacco products, heated tobacco products, and/or vapor
products.

4 C'J 14. MA)OR SUPERMARKETS - shall be those with the highest annual gross sales in
2l=
-/1
_J,rn Metro Manila oi- the region, as the case may be, as determined by the BlR, and
-)l>
1)c shall exclude retail outlets or kiosks, convenience or sari-sari stores, and others of
a similar nature. No two (z) supermarkets in the list to be surveyed are affiliated
>3
Jr7 and/or branches of each other. ln case a particular alcohol product, tobacco
zl ;, product, heated tobacco product, or vapor product is not sold in major
rt T))
zl
-j >l supermarkets, the price survey can be conducted in retail outlets where said
-t
<,ol alcohol product, tobacco product, heated tobacco product, or vapor product is
4 rnl
xfl sold in Metro Manila or region, as the case may be, upon the determination of the
Commissioner of lnternal Revenue.

15. MANUFACTURER - refers to any person or entity that is engaged in the business of
manufacturing, assembling, or processing of alcohol products, tobacco products,
heated products, or vapor products.

16. MARKETING AUTHORIZATION / FDA CERTIFICATION refers to the product

certification issued by the Food and Drug Administration (FDA).
t7. NET RETAIL PRICE (NRP) - shall mean the price at which alcohol products ancJ
tobacco products are sold on retail in at least five (5) major supermarkets in Metro
Manila, excluding the amount intended to cover the applicable excise tax and the
value-added tax. For alcohol products and tobacco products which are marketed
outside Metro Manila, the 'net retail price' shall mean the price at which the
alcohol products, tobacco products, heated tobacco products, or vapor products
are sold in at least five (5) major supermarkets in the region excluding the amount
intended to cover the applicable excise tax and the value-added tax. This shall
initially be provided by the manufacturer or importer through a sworn statement
and shall be validated by the BIR through a biannual price survey under oath.

t8. NON-COMPLIANT PACKAGES - refer to any vapor products or heated tobacco

products packaging, labelling, including mastercases, inserts, onserts, or outside
packaging and labelling, which fail to comply with packaging and/or labelling
requirements and specifications under the Graphic Health Warnings Law, Joint
Memorandum Circular (JMC) No. 3-zo2o, and other rules, regulations and
guidelines issued to further implement the provisions of RA N a.10643.

19. PROOF SPIRITS -

shall refer to liquor containing one-half (tlz) of its volume of
alcohol of a specific gravity of seven thousand nine hundred and thirty-nine ten
thousandths (o.lglil at fifteen degrees centigrade (rS"C). A proof liter means a
liter of proof spirits.
!

zo. RETAILER - rbfers to any person or entity engaged in the direct sale or offer for
sale of alcohol products, tobacco products, heated tobacco products, and/or
vapor products to consumers or end-users.

21. RETAIL PRICE - the amount of money or price which an ultimate

shall mean
consumer or end-user pays for alcohol products, cigars, or cigarettes heated and

Pase 3 or 17
{ Ut
 vapor products purchased.

22. splRlTs oR DISTILLED SplRlTs - shatl refer to the substance known as ethyl
alcohol, ethanot or spirits of wine, including all dilutions, purifications and mixtures
thereof, from whatever source, by whatever process produced, and shall include
whisky, brandy, rum, gin and vodka, and other similar products or mixtures.

23. sUGGESTED NET RETATL pRtCE - shall mean the net retail price (excluding the
excise tax and the value-added tax) at which tocally manufactured or imported
alcohol products, tobacco products, heated tobacco products, and/or vapor
products are intended by the manufacturer or importer to be sold on retail in
major supermarkets or retait outlets in Metro Manila for those marketed
nationwide, and in other regions, for those with regional markets.

24. TOBACCO pRODUCTS shall mean products entirely or partly made of leaf
tobacco as raw materiai that are manufactured to be used for smoking, sucking,
chewing or snuffing, or by any other means of consumption.

25. TRANSSHIPMENT shall refer to the transport or shipment of tobacco products'

-
heated tobacco products, andlor vapor products from a foreign port into any
port(s) of the philippines strictty for subsequent shipment to a foreign port or
destination where the shipping manifest pertaining thereto specifically states that
the destination thereof is for a foreign port without introducing the same into the
Philippine territory.
o,
6. VAPOR PRODUCTS - mean Etectronic Nicotine and Non-Nicotine Delivery systems
a
rn (EN DS/EN DS), which are combinations of (i) a liquid solution or 8el, that
N

o transforms into an aerosol without combustion through the employment of a

'?t
mechanicat or etectronic heating etement, battery or circuit that can be used to
2
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rn
heat such solution or gel, and includes, but is not timited to (ii) a cartridge, (iii) a
fr
z. tank, and (iv) the device without a cartridge or tank. lt is commonly known as
r nicotine salt/salt nicotine, gld conventional 'freebase' or 'classic''nicotine, and
7
rn
<i
other similar products. Al[ vapor products shall be covered regardless of its
rnl nicotine content.
l-JtZ
:f; 27. wHoLESALE pRlcE shall mean the amount of money or price paid for cigars or
-
cigarettes purchased for the purpose of resale, regardless of quantity.

sEcTloN 3. REVISED RATES AND BASES OF EXCISE TAX.

A. ALCOHOL PRODUCTS

1. DISTILLED SPIRITS
Excise Tax Due = Ad valorem tax + Specific tax
Date of effectivity I Ad valorem tax Specific tax
(start date) I [based'on the net retail (p"t proof liter)
price perproof
(excluding the excise
and value-added taxes
January 1i2o2o

Page 4 of
 January 23,2o7o zz% F4z.oo
January 1,2021 zz% ?47.oo
January 1,2022 zz% F5z.oo
January 1,2023 zz% F59.oo
January 1,2024 zz% P66.oo
2oz5 Onwards specific tax rate shall be
zz% increased by 6% and
every year thereafter

2. WINES
Date of effectivity (start date) Specific tax (per liter)
January 11 2o2o
Sparkling wines/champagnes where the NRP
(excluding the excise and VAT) per bottle of 75o ml
volume capacity, regardless of proof is:
a. Php 5oo or less F328.98
b. More than Php 5oo ?92t.'t5
Still wines and carbonated wines containing t4% of Flg.+B
alcohol by volume or less
Still wines and carbonated wines containing more P78.96
than t4% of alcohol by volume but not more than z5%
of alcohol by volume
@ Fortified wines containing more than z5% of alcohol Taxed as distilled spirits
D n
rn
by volume
rn
o January 23,zozo* F5o.oo
cD
- ,o?l January 1,2021 F53.oo
a -* z-i January 1,2022 F56.t B
g ;1-' LI
o
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fr January 1,2023 ?sg.ss
z
J Bs
C rrr
January 1,2024 763.t2
J
n
rn zo25 Onwards specific tax rate shall
D
3 m be increased by 6% and
every year thereafter
Note; *Beginning January 23, 2o2o, the classification of wines wos removed
pursuant to RA No. u467. All types of wines are subiectto specific'excise tax rotes
per liter,

3. FERMENTED LIqUORS
Date of effectivity (start date) Specific tax (per liter)
January 1, zo2o ?26.+j
January 23, zozo F35.oo
January 1,2ozl P37.oo
January 1,2ozz F39.oo
January 1,2023 F4r.oo
January 1,2024 ?43,oo
zoz5 Onwards specific tax rate shall
be increased by 6% and

Page 5 of 17
 B. TOBACCO PRODUCTS, HEATED TOBACCO PRODUCTS, AND VAPOR PRODUCTS

1. Heated Tobacco Products

Date of Effectivity Quantity Excise Tax Rate

January 1,2o2o Fr o.oo
Januarv 27,2o2o Pz5.oo
Januarv 1,2021 Per pack of zo units or ?27.5o
Januarv 1,2c_22 any packaging P3o.oo
January 1,2023 combinations of not ?32.5o
more than twenty (zo) specific tax rate shall
units be increased by SZ
2024 Onwards
every year effective
January 1,2024

lllustration A:

On January 23, 2o2o, BSM Corp. removes from its tobacco plant too cases of
Brand GTR heated tobacco. Note:1 case contains 5o reams while 1 ream contains
to packs
No. of Cases 100
Multiplied by the number of reams Per case 5o
Total Number of Reams 5,ooo
Multiplied by No. of Packs Per ream 10

Total Number of Packs 5O,OOO

Multiplied by Tax Rate 25.oO
Total Excise Tax Due Pt,z5o,oo o.oo

2. Vapor Products
Excise Tax

l-N;
lml-__--zr,tt
lsi-r2J
lR
Date of Effectivi
January 1, zo2o to
January 22,2o2o
Quantity
o.ooml to to.ooml
1o.o1ml to zo.ooml
Fro.oo
Fzo.oo
IXA - l+"E zo.otml to 3o.ooml F3o.oo
BtF-k ls: 3o.o1 ml to 4o,o!I!! P4o.oo
F5o.oo
,i 4o.otml to 5o.oo ml
aEsael;' More than 5o.ooml F5o.oo plus Fto.oo for
iqEEfi every additional to.oo ml

sE:==-5Hl
ZI\--, Za
a. Nicotine Salt or Salt Nicotine
:ffi| Date of Effectivity Quantity Excise Tax Rate
Januarv z3,2o2o P37.oo
?4z.oo
l*""rv l, nn t

Per milliliter or a
P47.oo
F5z.oo
fraction thereof
rate shall be increased
2024 Onwards by SZ every year
effective January 1, 2024
D
r
Page 6 or
/ \J{' 1
b. Conventional'Freebase' or tClassic' Nicotine

Date of Effectivity Quantity Excise Tax Rate

E'
January 23, zozo I-45.oo
January 1,2021 F5o.oo
January 1,2022 F55.oo
Per ten (to) milliliter or a
January 1,zoz3; P6o.oo
fraction thereof
rate shall be increased
2024 Onwards by S% every year
effective January 1, 2oz4

The rates imposed herein shall apply to any liquid substance,

of tax
regardless of nicotine content, including nicotine-free liquid or any similar product.

lllustration B:

On January 4,2021, BK Corp. removes from its finished goods facility Brand Rl
Vapor Products with the following details:

i. Nicotine Salt or Salt Nicotine - containing less than 1 ml.

Product Type: Nicotine Salt or Salt Nicotine with container size of
o.8ml 3oo packs of vapor products with z pods per pack

Per Container
Container Size o.8 ml
No. of Packs 300
Multiplied by nurnber of pods per pack 2

Total number of pods 6oo

Multiplied by Tax Rate 42.oo
Total Excise Tax Due Fz5,zo o. o o

Conventional trFreebase" or t'Classic" Nicotine - Release of Product on

January 11,2o.21containing less than toml
Product Type: Conventional "Freebase" or "Classic" Nicotine with
container size of 7ml.

Applicable tax rate of P5o, a fraction of toml.

joo packs of vapor products
t small bottle/pack
No. of Packs 300
Multiplied bv Tax Rate 5o.oo
Total Excise Fr 5,ooo.oo

iii. Conventional rrFreebase" or "Classic" Nicotine w/ container size of t5ml

Product Type: Conventional "Freebase" or "Classic" Nicotine with
. container size of t5ml was released on January 8, 2021.

Applicable tax rate of Ptoo.oo, [to ml.(P5o.oo) plus a fraction of

roml.(P5o.oo)] 3oo packs of vapor products
t small bottle/pack
BtIREAU Or rNT[- EVENUE
ril \-il /rY l-r i-rr(IIlR
*ft'*,, W' Page 7 or 1t

ilEc o n'o 5 t, qlq t v t s' o'l

 No. of Packs 300
Multiplied bv Tax Rate 100
Total Excise Tax Due P3o,ooo.oo

3. Cigars and Cigarettes

a. Cigars [Excise tax = ad valorem tax plus (+) specific tax]

Date of Effectivity Ad Valorem Tax Add: Specific Tax

Rate is based on the net
retail price per cigar
(excluding the excise
and value-added taxes)
January 1,zo2o zo% ?o.st
January 1,2021 zo% P6.83
January 1,2022 zo% ?7.to
January 1,2c_23 zo% ?t.t8
rate shall be increased
2oz4 Onwa,rds zo% by S% every year
effective January 1, 2024

b. Cigarettes packed by hand

F+r!-rl

n=f,
m rT]
Date of Effectivity Quantity Excise Tax Rate
c) >+ January 1,2o2o F45.oo
o
D
c+
d P5o.oo
January 1,2021
(,
a 4 .f Per pack of zos or any
P55.oo
d January 1,2022
3 )l ,t packa ging combinations
January 1,2023 P6o.oo
--l il1
G) :;i,
J of not more than zo
rate shall be increased
I { >l
2024 Onwards
packed by hands
by S% every year
5 al
a rri
effective January 1, 2024
a ITT
z z
m c. Cigarettes packed by machine

Date of Effectivity Quantity Excise Tax Rate

January 1, )o2o F45.oo
Januarv 1,2021 P5o.oo
Per pack of zos or any
Januarv 1,2022 P55.oo
packaging combinations
January 1,2o2 F6o.oo
of not more than zo
rate shall be increased
packed by machine
2oz4 Onwards by SZ every year
effective January 1, 2024

SECTION 4. PROVISIONS ON TOBACCO PRODUCTS, HEATED TOBACCO PRODUCTS AND

VAPOR PRODUCTS.

A. LABELS AND PACKAGES t

The tabels and/or packages of products shall comply with the following:

1. Duly registered cigarettes packed by hand, cigarettes packed by machine and

heated tobacco products shall only be packed in twenties and other packaging
com binations of not more than twenty (zo) units.

(f \y: 'Pas" B of 17
 2. No person or legal entity shall sell or commercially distribute or display any vapor
products or heated tobacco products without ensuring that the labels and
packages, as well as any other container used in displaying the said products, meet
the requirements under RA Nos. 11j46 and 'n467, the Graphic Health Warnings
Law, and relevant rules and regulations.

j. Manufacturers, distributors, and importers of vapor products shall be required to

indicate on the package the actual volume in milliliters of the liquid solutions and
gels.

4. Manufacturers, distributors, and importers of vapor products and heated tobacco

products shall submit to the BIR exact replicas of the packaging and other
container or wrapping of the vapor products or heated tobacco products, duly
compliant with the Graphic Health Warning Template and the relevant rules and
regulations, as a requirement in applying for registration in accordance with
Section t56 of the National lnternal Revenue Code (NIRC), as amended, and RR
Nos. o3-zoo6 and t7-2o12, as amended, and other relevant revenue issuances.

5. No stamp taxes shall be affixed on non-compliant packages and the taxpayer shall
certify under oath that the products withdrawn are compliant with the Graphic
@ Health Warnings Law and the templates approved and issued by the DOH, as well
n T as under existing revenue issuances.
m m
c)
o
n - cirl For standard affixing of stamps and appropriate payment of excise tax, vapor
(f products shall be packed as follows:
(n
h 2
{
ts- i-n a. Nicotine salt - t ml or less, z ml or less, 3 ml or less, 4 ml or less, 5 ml or less, 7
6)
:{ cti\ I
Z
cf
I\J
(= ml or less and maximum of to ml per pod.
,\t
.* fr
a m b. Freebase - 1o mt or less, zo ml or less, 3o ml or less, 4o mt or less, 5o ml or less,
o m
:z 7o ml or less and maximum of too ml per pack.
-!(
:H Higher product packaging or packaging with no correspondin$ equivalent will
use a combination of two stamps.

B. EXPORT AND TRANSFER BOND

No tobacco products, heated tobacco products, or vapor products manufactured

in the Philippines and produced for export shall be removed from their place of
manufacture or exported without posting of an export bond equivalent to the
amount of the excise tax due thereof if sold domestically. However, tobacco
products, heated tobacco products, or vapor products for export may be
transferred from the place of manufacture to a bonded facility, upon posting of a
transfer bond, prior to export.

c. TRANSSHIPMENT

Tobacco products, heated tobacco products, or vapor products imported into the
Philippines and destined for foreign countries shall not be allowed entry without
posting a bond equivalent to the amount of customs duty, excise and value-added
taxes due thereon if sold domestically.

{ W Pase e of 1T
 D. INSPECTION FEE

For inspection/s made in accordance with this Chapter, there shall be collected a

fee detailed as follows: (9a6)

UNIT OF MEASURE
INSPECTION
PRODUCT Pieces/Sticks/
FEE Milliliter Kilo
Units
Cigars Fo.5o 1,OOO Or
'!:ff:i'r:i :t1l:, l:

fraction
,,lo,i'::- :l::it. ,,;,::i:,:

thereof
:,:1,1:;.i

Cigarettes Fo.t o 1,OOO Or t

,, .,iil ,.t''r:,' ,
fraction . 1".. ;,,,.:',.:

thereof .
'r:.:i,,rir.,r:,.'' , .,i

Heated Fo.to 1,OOO r!,it;ii,i:ffi

!;;
I i:,,,:,:,:;i i: i,t; :,

tobacco

ffi1
Vapor Po.ot 1.OO

Products
Whole Leaf Po.oz 1.OO Or

Tobacco fraction
thereof
IEfr$a
W;
Scrap and Other Fo.o3 !i"i";;i'i4 1.OO Or

F@a
:: /'t';:;f1
l;l?.:i"

Mfd. Tobacco
:,,.

:
'":.)'i't
Yrtitl fraction
thereof

E. INFORMATION TO BE GIVEN BY MANUFACTURERS, IMPORTERS, INDENTORS AND

WHOLESALERS OF ANY APPARATUS OR MECHANICAL CONTRIVANCE SPECIALLY
FOR THE MANUFACTURE OF ARTICLES SUBJECT TO EXCISE TAX AND IMPORTERS'
TNDENTORS, MANUFACTURERS OR SELLERS OF CIGAREfiE PAPER lN BOBBINS,
CIGAREfiE TIPPING PAPER OR CIGARETTE FILTER TIPS.

Manufacturers, indentors, wholesalers and importers of any apparatus of mechanical

contrivance specially for the manufacture of articles subiect to tax shall, before any
such apparatus or mechanical contrivance is removed from the place of manufacture
or from the customs house, give written information to the Commissioner as to the
nature and capacity of the same, the time when it is to be removed, and the place for
which it is destined, as well as the name of the person by whom it is to be used; and
such apparatus or mechanical contrivance shall not be set up nor dismantled or
transferred without a permit in writing from the Commissioner and/or Authorized
Representative.

A written permit from the Commissioner/Authorized Representative for importin$,

manufacturing or sellin g of apparatus or mechanical contrivance specially for the
manufacture of artictes subject to excise tax, cigarette paper in bobbins or rolls,
cigarette tipping paper or cigarette filter tips is required before any person shall
.ngrge in the importation, manufacture or sale of the said articles. No permit to sell
said articles shall be granted untess the name and address of the prospective buyer
is

first submitted to the Commissioner and approved by him/her. Records, showing the
stock of the said artictes and the disposal thereof by sale of persons with their
respective addresies as approved by the Commissioner/Authorized Representative,
shall-be kept by the seller, and records, showing stock of said articles and

{v '\f' Page 10 of 17
 consumption thereof, shall be kept by the buyer, subject to inspection by internal
revenue officers.

F. FLOOR PRICE OR MINIMUM PRICE

The minimum ftoor price of cigarette, heated and vapor tobacco products shall be the
total production cost/expenses of the cheapest brand per tobacco product including
the sum of excise tax and VAT. The ELTRD shall established a monthly data profile
based on the required periodic manufacturer's or importer's sworn declaration for all
brands per tobacco product cate gory.Provided below are illustrations for reference.

1. Cigarettes
Production Cost per Sworn Declaration Pzo.oo
Excise Tax (zozr) 5o.oo
VAT 8.4o
TOTAL/FLOOR PRICE P78.4o

2. Heated Tobacco Products

Production Cost per Sworn Declaration Pzo.oo
Excise Tax (zozt) 42.oo
VAT 7.44
TOTAL/FLOOR PRICE P69.44

j. Vapor Products:

3.a Nicotine Salts

P i. Production cost of Php 1o.oo per o.1 milliliter of e-liquid content
7 n
rn
m
(-) ii. Production Cost of Pro.oo per o.1 ml per pod is 2.5 ml
C)
n ()
n
iii. Production cost is Php 1o.oo per o.1 milliliter.
Cf
(n i
3 .{
n
6) .a
{ 2_
o
7) 3.b Freebase Nicotine
2
=
rn
i. Production cost of Php 5.oo per 1 milliliter of e-liquid content
c2. rn ')F Volume per tank to
ii. Production cost - Php 5.oo per ml
'. Volume - z5

FLOOR PRICE SAMPLE

Volume FLOOR
Nicotine Pack/ PRODUCTION COST EXCTSE
Unit Content VAT PRICE
Formulation Fill TAX
(ml) PER UNIT AMOUNT 2021

N co ne Salts pod o.7 ml o.7 Pro/ o.r ml 7o 4) 13.44 125.44

N co ne Salts pod z.s ml 2.5 Pro/ o.r ml 250 tz6 45.12 42',t.12
Nicotine Salts pod 4 pod 2.8X4 Pro/ o.r ml 1120 84o 235.2o 2,195'2o
pack 4 pack t

Freebase tank ro ml 10 P5/ t ml 5o 5o 12.OO 112.OO

Nicotine
Freebase tank z5 ml 25 P5l r ml 125 150 JJ.OO 3o8.oo
Nicotine

The above floor price shall only be used as reference for taxation purposes in the
absence of other documents/proof
l'
as to the actual price of the product that is

Pasell or17
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15i'! n '

ffi
'14
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go aff*l

higher than the identified floor price.

s7!*rJj|j
REC.] RDS MGT. L)iVI SION

SECTION j. COMMON PROVISIONS FOR ALCOHOL PRODUCTS, TOBACCO, HEATED

TOBACCO, AND VAPOR PRODUCTS

t. TAX CLASSIFICATION OF ALCOHOL PRODUCTS, TOBACCO PRODUCTS, HEATED

TOBACCO PRoDUCTS AND VAPOR PRODUCTS. - Any alcohol products, tobacco
products, heated tobacco products and vapor products that are introduced in the
domestic market on or after the effectivity of any law imposing new tax rates shall be
initially classified for tax purposes accorciing to their suggested net retail prices as
declared in the prescribed updated manufacturer's or importer's sworn statement,
subject to the initial validation and revalidation requirements prescribed under
Revenue Regulations (RR) No. 3-zoo6, as amended.
ln case of aLohol products, heated tobacco products and vapor products that were
duly registered with the BIR before the effectivity of any law imposing new tax rates
but were no tonger classified under the new law shall be deemed as newly introduced
products in the domestic market. The tax ctassification thereof shall be based on the
suggested net retail price declared in the aforesaid sworn statement, subiect to the
initial validation and revalidation requirements.

II. WILLFUL UNDERSTATEMENT OF SUGGESTED NET RETAIL PRICE. ThC

understatement of the suggested net retait price by as much as fifteen percent (15%)
of the actual net retail price as determined using the survey price net of excise and
value added taxes declared per manufacturer/importer's sworn statement, shall
render the manufacturer or importer of covered products per RA No. t 1346 and t 1467
liable for additionai excise and'value added ta'xes 'equivalent to the difference
between the recomputed (excise and value added) taxes based on the annual net
retait price and the declared excise and value added taxes per submitted sworn
statement.
III. SUBMISSION OF SWORN STATEMENT OF THE VOLUME OF SALES AND BEMOVALS' -
Within 3o days from the effectivity of RA No. tt467, and within the first five (5) days of
every month thereafter, manufacturers, brewers, distillers, distributors, and importers
of alcohol products, and tobacco products, heated tobacco products and vapor
products shall submit to the Commissioner a sworn statement of the volume of sales
and removals for each particular brand sold for the three-month period immediately
preceding.

Any manufacturer, brewer, distiller, distributor, or importer who misdeclares or

misrepresents in his or its sworn statement herein required any pertinent data or
information shatl, upon final findings by the Commissioner that the violation was
committed, be penatized by a summary- cancellation or withdrawal of permit to
engage in business as manufacturer, brewer, distiller, distributor, or importer of
alclnol products, and/or tobacco, heatgd tobacco products and vapor products.
IV. EXTENT OF SUPERVISION OVER ESTABLISHMENTS PRODUCING TAXABLE OUTPUT.
The BIR shall supervise estabtishments where articles subiect to excise tax are made
or kept. The Secretary of Finance shalt prescribe rules and regulations in which the
process of production shall be conducted insofar as may be necessary to secure a

g
sanitary output and to safeguard revenue, such rutes and regulations to safeguard

\y'
Pase 12 of 17
 revenue may allow the appointment of third parties to rnonitor production and
removal processes and volumes, and the exclusion of excisable goods from duty-free
barter transactions.

v. coMMoN PENALTY PROVISIONS. - Any corporation, association or paftnership liable

for any of the acts or omissions in violation of Sections 141, 142, 143, 144 or 145 of the
NIRC, as amended, shall be fined treble the aggregate amount of deficiency taxes,
surcharges and interest which may be assessed.

Any person liabte for any of the acts or omissions prohibited under Sections 141, 142,
14i,,144 or 145 of the NIRC, as amended, shall be criminally liable and penalized under

Section 254 of the NIRC, as amended. Any person who willfully aids or abets in the
commission of any such act or omission shall be criminally liable in the same manner
as the principal.

lf the offender is not a citizen of the Philippines, he/she shall be deported immediately
after serving the sentence, without further proceedings for deportation.

VI. STATUTORY OFFENSES AND PENALTIES

A. UNLAWFUL POSSESSTON OF CIGARETTE PAPER lN BOBBINS OR ROLLS, ETC. - lt
shalt be unlawfut for any person to have in his possession cigarette paper in
bobbins or rotls, cigarette tipping paper or cigarette filter tips, without the
corresponding authority therefor issued by the Commissioner. Any person,
importer, manufacturer of cigar and cigarettes, who has been found guilty, shall,
upon conviction for each act or omission, be punished by a fine of not less than
One Million Five Hundred Thousand pesos (Pt,5oo,ooo.oo) but not more than
Fifteen Million pesos (Pr5,ooo,ooo.oo) and imprisonment for a term of not less
than six (6) years and one (r) day but not more than twelve (tz) years.

B. VTOLATTONS COMMTTTED BY MANUFACTURERS, IMPORTERS, INDENTORS, AND

WHOLESALERS OF ANY APPARATUS OR MECHANICAL CONTRIVANCE SPECIALLY
l@ FOR THE MANUFACTURE OF ARTTCLES SUBJECT TO EXCISE TAX AND IMPORTERS,
IC
D n
rn
TNDENTORS, MANUFACTURERS OR SELLERS OF CIGARETTE PAPER lN BOBBINS,
)TI CTGARETTE TIPPING PAPER OR CIGARETTE FILTER TIPS. - Any violation of Section
)D C
o of any apparatus or
)n - I -"1 164 of the NIRC, as anrended, including me!'e possession
Z mechanical contrivance for the manufacture of cigarettes, cigarette paper, or
L
;)
==r.-r
€
w6
{l
inl cigarette tipping paper, for which no permit was obtained from the Commissioner
{ nl
zl
) 3s
CN,
- -.-
>l
t-l
shatl be punishable with a fine of not less than Fifteen Million pesos
.(Pr5,ooo,ooo.oo) but not more than Fifty Million pesos (P5o,ooo,ooo.oo) and
TI
; ml
<l imprisonment of not tess than twelve (rz) years but not more than twenty (zo)
5
Z 2l
CI years.
ml
, SELLING OF TOBACCO PRODUqTS AT A PRICE LOWER THAN THE COMBINED
EXCISE AND VALUE-ADDED TAXES. - Any person who sells tobacco products
including heated tobacco products and vapor products at a price lower than the
combined excise and value-added taxes shall be punished with a fine of not less
than ten (ro) times the amount of excise tax plus value-added tax due but not less
than Two htrndred thousand pesos (Pzoo,ooo.oo) nor more than Five hundred
thousand pesos (P5oo,ooo.oo), and imprisonment of not less than four (4) years

L Page 13 of 17
{
 but not more than six (6) Years.
UNDER FALSE
D. sHtpMENT OR REMOVAL OF LtqUOR OR TOBACCO PRODUCTS
NAME OR BRAND OR AS AN IMITATION OF ANY EXISTING OR OTHERWISE
KNowN pRoDUcr NAME oR BRAND RELATTvE To RA No. 11346 - Any
person
liquors,
who ships, transports or removes spirituous, compounded or fermented
the proper
wines or any manufactured products of tobacco under any other than
quality of the
name or brand known to the trade as designating the kind and
contents of the package containing the same or as an imitation
of any existing or
done, shall upon
otherwise known product name ortrand or causes such act to be
conviction for each act or omission, be punished by a fine of
not less than one
than Fifteen
Million Five Hundred Thousand pesos (pr,5oo,ooo.oo) but not more
(6) years and
Million pesos (pr5,ooo,ooo.co) and imprisonment of not less than six
one (t) duy but not more than twelve (rz) years'
TO EXCISE TAX
E. UNLAWFUL POSSESSION OR REMOVAL OF ARTICLES SUBJECT
is found in
WITHOUT PAYMENT OF THE TAX - Any person who owns and/or
has not
possession of imported articles subiect to excise tax, the tax on which
is found
been paid in accordance with law, or any person who owns and/or
in

possession of imported tax-exempt articles other than those to

whom they are
legally issued shall be punished by:

1. A fine of not tess than One Hundred Thousand pesos (Ptoo,ooo.oo)

but not
of
more than Two Hundred Thousand pesos (pzoo,oooo.oo) and imprisonment
days if the
not tess than sixty (6o) days but not more than one hundred (roo)
appraised value, to be determined in the manner prescribed
in Republic Act No'
Act (CMTA)',
rog63, otherwise known as the'Customs Modernization and Tariff
Hundred Fifty
inctuding duties and taxes, of the articles does not exceed Two
Thousand Pesos (Pz5o,oo9.oo);
more than
2. A fine of not less than one Million pesos (pr,ooo,ooo.oo) but not
Two Million pesos (pz,ooo,ooo.oo) and imprisonment of not less than
two (z)
years but not more than four (4) years if the appraised value, to be
determined
known as the
in the manner prescribed in Republic Act No. to863, otherwise
,Customs Modernization and Tariff Act (CMTA)', including duties and taxes, of
but
the articles exceeds Two Hundred Fifty Thousand pesos (Pz50,ooo.oo)
does not exceed Five Hundred Thousand pesos (P5oo,ooo'oo);
(p3,ooo,ooo.oo) but not more than
3. A fine of not less than Three Million pesos
2 Four Million pesos (p4,ooo,ooo.oo) and imprisonment of not less
than four (4)
7
m
i
irt years but not more than six (6) years, if the appraised value, to be
determined
as the
C)
o in the manner prescribed in Republic Act No. to863, otherwise known
n - ,Customs Modernization and Tariff Act (CMTA)', inctuding duties and taxes of
c,
a k
ts
'3
a-l

2.-t the artictes is more than Five Hupdred Thousand pesos (P5oo,ooo.oo)
but does
ITT
G)
:{ @ E
Z
not exceed One Million pesos (Pt,ooo,ooo'oo);
(f l\t
er' not more than
FrI,
.J, 7 A fine of not less than Ten Million pesos (Pto,ooo,ooo.oo) but
than ten
Twenty Million pesos (pzo,ooo,ooo.oo) and imprisonment of not less
rn
9
=
o
(ro) years b.ut not more than twelve (rz) years, if the appraised value, to
rn be
:E
-'.1-r-

^ determined in the manner prescribed in Republic Act No. to863, otherwise

Page 14 of 17
{
 known as the'Customs Modernization and Tariff Act (CMTA), including duties
and taxes, of the articles exceeds One Million pesos (Pt,ooo,ooo.oo);

Any person who is found in possession of locally manufactured articles subiect

to excise tax, the tax on which has not been paid in accordance with law, or any
person who is found in possession of such articles which are exempt from
excise tax other than those to whom the same is lawfully issued shall be
punished with a fine of not less than ten (ro) times the amount of excise tax
due on the articles found but not less than One Million pesos (Pt,ooo,ooo.oo)
and imprisonment of not less than five (5) years but not more than eight (8)
years.

Any manufacturer, importer, owner or person in charge of any articles subiect

PII
vm ll to excise tax who removes or allows or causes the unlawful removal of any
-.
ml
zl such artictes from the place of production or bonded warehouse, upon which
C)
o
g' - ;lll the excise tax has not been paid at the time and in the manner required, and
ut1 ;* any person who knowingly aids or abets in the removal of such articles as
3l aforesaid, or conceats the same after illegal removal shall, for the first offense,
o
= Eg *l
21 be punished with a fine of not less than ten (ro) times the amount of excise tax
:{
I t({ t->
e,
l-t\t
I .4 ,-n due on the articles
but not less than Fifty Million pesos (P5o,ooo,ooo.oo) and
a
= imprisonment of not less than five (5) years but not more than eight (8) years.
lo IH
lz rZ
l- The mere unexplained possession of articles subject to excise tax, the tax on
rn
which has not been paid in accordance with law, shall be punishable under this
Section.

sEcTtoN 6. OFFENSES RELATTNG TO STAMPS, LABELS, TAGS, AND OTHERS. - Any

person who commits any of the acts enumerated hereunder shall, upon conviction
thereof, be punished by a fine of not less than Ten Million pesos (Rro,ooo,ooo.oo) but not
more than Five Hundred Million pesos (P5oo,ooo,ooo.oo) and imprisonment of not less
than five (5) years but not more than eight (8) years:

l. Making, importing, selling, using or possessing without express authority from the
Commissioner, any dye for printing or making stamps, labels, tags or playing cards;

ll. Reusing previously affixed stamps, erasing the cancellation marks of any stamp
previously used, or altering the written figures or letters or cancellation marks on
internal revenue stamps;

lll. Possessing false, counterfeit, restored or altered stamps, labels or tags or causing
the commission,of any such offense by another;

lV. Selling or offering for sale any box or package containing articles subiect to excise
tax with false, spurious or counterfeit stamps or labels or selling from any such
fraudulent box, package or container as aforementioned; or

V. Giving away or accepting from another, or selling, buying or using containers on

which the stamps are not completely destroyed.

The cumulative possession of false/counterfeit/recycled tax stamps in excess of the

amount of Fifty Mitlion pesos (P5o,ooo,ooo.oo) shall be punishable by a fine of Five

Pase 15 of 17
V.
 Hundred Million pesos (p5oo,ooo,ooo.oo) or up to ten (ro) times the value of the illegal
stamps seized, whichever is higher, and imprisonment of not less than ten (ro) years but
not more than fifteen (t5) Years.

SECTION 7. TRANSITORY pRovlstoNs. upon the effectivity of RA No. tt467' the

following transitory provisions shall be strictly observed by all concerned:
l. Distilled spirits introduced in the domestic market after the effectivity of RA No.
y467 shall be initially taxed according to their suggested net retail prices.

il. At the end of three (3) months from the product launch, the BlR, through the
EL.l RD, shall validate the suggested net retail price of the new brand
against the
net retail price as defined herein. After the end of nine (9) months from such
validation, the EL'TRD shall revalidate the initially validated net retail price against
the net retail price as of the time of revalidation in order to finally determine the
correct tax on a newly introduced distilled spirits.

ilt. Manufacturers qnd importer.s of distilled spirits and wines, and every brewer,
manufacturer or importer of fermented liquor shall, within thirty (lo) days from
the effectivity of RA No. 1467, and within the first five (5) days of every third
month thereafter, submit to the Commissioner, through the Large Taxpayers
performance Monitoring & Programs Division, a sworn statement of the volume
of sales and removals for each particular brand of distilled spirits, wines and

tv.
fermented tiquor sold at his establishment for the three-month period
immediately preceding.

A. Manufacturers and importers of cigars and cigarettes shall within thirty

days from the effectivity of RA No. rr346 which is JanuarY 1,j02o and
(fo)
within
t
five (5) days of every month thereafter, submit to the Commissioner through
Excise LT Field operations Division (ELTFOD) copy furnished LT Per{ormance
Monitoring and programs Division (lfennPD) a sworn statement of the volume
of sales and removals for cigars and/or cigarettes for the three-'inonth period
immediately Preceding.

B. Manufacturers, distributors and importers of heated tobacco and vapor

4CD
J,/ n
products shall register with the BIR through Excise LT Regulatory Division
rlm (ELTRD), within tliirty (lo) days from effectivity of RA No. tB+6h1467 and/or
rz= from the issuance of the FDA Marketing Authorization and within five (5) days
l-
l-D
[s ol
tar< ,/1"'tl of every month thereafter, submit to the Commissioner through ELTFOD and
r-' LTPMpD a sworn statement of the votume of sales for each particular brand
of
$
pa :it3l
tsnr ,-1 gl heated/vapor products sold for the three-month period immediately
(Gr
-t\,
iil preceding.

During the eighteen (r8) months period from effectivity of the IRR of RA No.
ilHl C.

,El 1346 and ,n467, taxpayers shall first secure a certification from the FDA
rellecting details/descriptions of the product before registration of taxpayer
and product variant by the BIR through ELTRD. The BIR shall register the
taxpayer based on the receipt of FDA Certification and necessary registration
requirements.

V. M anufacturers, distributors, importers and sellsrs of heated tobacco products and

Pase 16 or 17

{
\)f
 vapor products are given a period of eighteen (t8) months from the effectivity of
the lmplementing Rules and Regulations (lRR) of RA Nos. t946 and t't467 to
comply with the requirements of . the Graphic Health Warnings Law, its
lmplementing Rules and Regulations, and all other relevant rules and regulations
in relation to the implementation of the Graphic Health Warnings Law.

Vl. Eighteen (r8) months after the effectivity of the IRR of RA Nos. tt346 and tt467,
no person or legal entity shall sell or commercially distribute or display any heated
tobacco products and vapor products which are not compliant with the labelling,
packaginE, ds well as any other container used in displaying the said products,
under appropriate revenue issuances by the Bureau.

SECTION 8. DISPOSITION OF REVENUES FROM EXCISE TAX ON SUGAR-SWEETENED

BEVERAGES, ALCOHOL, TOBACCO PRODUCTS, HEATED TOBACCO PRODUCTS AND
VAPOR PRODUCTS. Revenues from sugar sweetened beverages, alcohol, tobacco,
heated tobacco and vapor products shall be allocated in accordance with RA No. tt346
for revenues collected from January 1 to 22,2ozo and RA No. tt467 from January 23,2o2o
onwards.

SECTION CONGRESSIONAL OVERSIGHT COMMITTEE. - The methodology and all

g.
pertinent documents used in the conduct of the latest price survey shall be submitted to
the Congressional Oversight Committee on the Comprehensive Tax Reform Program
(COCCTRP) created under RA No. 824o.

SECTION ro. REPEALING CLAUSE. This Revenue Regulations specifically repeals Section
-
4 and 6 of RR No. 17-zo1z and Revenue Memorandum Circular (RMC) No.9o-2o12. Any
other laws, decrees, executive orders, rules and regulations or parts thereof which are
contrary to or inconsistent with-tlrese Regulations are hereby repealed, amended, or
modified accordingly.

SECTION tt. SEPARABILITY CLAUSE. - lf any provisions of these Regulations shall be held
unconstitutional or invalid, the other provisions not otherwise affected shall remain in full
force and effect.

SECTION 12. EFFECTIVITY. - These Regulations shall take effect immediately fifteen (t5)
days after publication thereof in a leading newspaper of general circulation.

OS G. DOMINGUEZ
Secretory of Finance

Recommend ing Approval: ilAY 1 0 2021

j/t5q/.'t{%-r1l
V
BtiRENU CIF IIdTERNAL REVENUE
CAESAR R. DULAY
Commissioner of lnternal Revenue
t'lAY 1S 2UZl
D-
042537
I HREA, LT S-Exci se I b sm I gtr RECORDS MGT. DIVISION

Page 17 of 17