REVENUE MEMORANDUM CIRCULAR NO. 105-2023 issued on October 10, 2023 provides clarification and guidance on the affixture of internal revenue stamps on vapor products pursuant to Section 9 of Revenue Regulations (RR) No. 18-2021 and Section 4 (H) of RR No. 14-2022.
All importations and removals from the place of production of vapor products shall be affixed with the internal revenue stamps prescribed by the aforementioned regulations and other related revenue issuances, subject to the transitory provisions outlined in the Circular.
The internal revenue stamp for locally manufactured products for the domestic market and imported products shall be affixed at the upper or top portion of the immediate, exposed container of vapor products (e.g., carton boxes or bottles), overlapping the intended opening of the immediate container in such a manner as to effectively seal the container and prevent the removal of the product without breaking the said stamp and before the immediate container is wrapped in cellophane or transparent wrapper, if applicable.
Moreover, the internal revenue stamp shall be affixed on the container in a manner without violating the health warning requirements prescribed under existing law, rules and regulations. Provided that, the immediate container (in case of boxes or similar type of container) of vapor products shall have no other opening, at the bottom or any other side, except the opening at the upper or top portion of the container so as to avoid the removal of the product without breaking the stamp affixed on the intended opening of the container.
The Excise Tax rates imposed shall apply to any liquid substance per milliliter (nicotine salt) of vapor product or a fraction thereof, or per 10 milliliters (conventional freebase) or a fraction thereof. One (1) tax stamp shall be affixed on every container or packaging of vapor products. There shall be prescribed seven (7) container/packaging types according to type and volume content of vapor product and corresponding Excise Tax due thereon, to wit:
| Type and Volume of Product | Current Excise Tax Rate (2023) | Excise Tax Due |
|---|---|---|
| Nicotine Salt (1 ml) | ₱ 52.00 (x 1) | ₱ 52.00 |
| Nicotine Salt (2 ml) | ₱ 52.00 (x 2) | ₱ 104.00 |
| Nicotine Salt (5 ml) | ₱ 52.00 (x 5) | ₱ 260.00 |
| Conventional Freebase (10 ml) | ₱ 60.00 (x 10) | ₱ 60.00 |
| Conventional Freebase (30 ml) | ₱ 60.00 (x 30) | ₱ 180.00 |
| Conventional Freebase (60 ml) | ₱ 60.00 (x 60) | ₱ 360.00 |
After the approval of the order of internal revenue stamps and prior to its release from the APO Production Unit, Inc. (APO) designated plant, the printing and personalization cost thereof shall be paid by the local manufacturer or importer of vapor products to APO in the amount of One Peso (₱ 1.00) per piece of internal revenue stamp for a minimum of 1,650,000 pieces per order and Two Pesos and Fifty Centavos (₱ 2.50) per piece of internal revenue stamp for a minimum of 165,000 pieces per order.
The taxpayer shall encode or record, in the Transcript Sheets of Official Register Book
(ORB) prescribed in the Circular, the range of Unique Identifier Codes (UICs) of internal revenue stamps received and affixed on vapor products. He/she/it shall submit such ORB to the LT Performance Monitoring & Programs Division (LTPMPD) or to the concerned Excise Tax Area (EXTA) having jurisdiction of the place of production/warehouse on or before the eighth (8th) day of the month immediately following the month of operation and every 8th day of every month thereafter.
RR No. 18-2021 provides for the procedures for the ordering, distribution, and monitoring of internal revenue stamps, as well as report generation relative thereto, which are adopted for purposes of the Circular.
Upon the effectivity of the Circular, all manufacturers, importers, and distributors shall submit an inventory list, signed by an authorized representative, of all stocks of vapor products using the format in Annex “B” of the Circular. The said inventory list shall be submitted to the Chief, Excise LT Field Operations Division, National Office Building, BIR Road, Quezon City, within fifteen (15) calendar days immediately after the effectivity of the Circular.
All concerned local manufacturers and importers of vapor products shall enroll with the Enhanced Internal Revenue Stamps Integrated System (IRSIS) and the orders for the internal revenue stamps prescribed in the Circular shall be submitted for approval by the BIRnot later than fifteen (15) days after the effectivity of the Circular.
Effective June 1, 2024, all containers (e.g., carton boxes) of vapor products must be compliant with the design configuration/specifications prescribed in the Circular, specifically that they shall have only one opening. Also, all vapor products manufactured in the Philippines and/or imported into the Philippines shall be affixed with the internal revenue stamps prescribed by the Circular and other related revenue issuances.