REVENUE MEMORANDUM CIRCULAR NO. 49-2023 issued on May 5, 2023 updates the floor price of cigarettes, heated tobacco, vaporized nicotine and non-nicotine products and reiterates the imposition of corresponding penalties, sanctions and liabilities for noncompliance there with.
Below is the updated floor price for the following tobacco products:
| Packaging | Content per Packaging | Production Cost/ Total Landed Cost | Excise Tax | VAT | Total Tax | Floor Price |
|---|---|---|---|---|---|---|
| Pack | 20 sticks | ₱ 42.32 | ₱ 60.00 | ₱ 12.28 | ₱ 72.28 | ₱ 114.60 |
| Ream | 10 acks | ₱ 423.20 | ₱ 600.00 | ₱ 122.80 | ₱ 722.80 | ₱ 1,146.00 |
| Packaging | Content per Packaging | Production Cost/ Total Landed Cost | Excise Tax | VAT | Total Tax | Floor Price |
|---|---|---|---|---|---|---|
| Pack | 20 sticks | ₱ 75.00 | ₱ 32.50 | ₱ 12.90 | ₱ 45.40 | ₱ 120.40 |
| Packaging | Pack/Fill | Content per Packaging | Production Cost/ Total Landed Cost | Excise Tax | VAT | Total Tax | Floor Price |
|---|---|---|---|---|---|---|---|
| Pod | 1 | 2ml | ₱ 74.57 | ₱ 104.00 | ₱ 125.43 | ₱ 200.00 | ₱ 200.00 |
| Pod | 1 | 4ml | ₱ 108.94 | ₱ 208.00 | ₱ 38.03 | ₱ 38.03 | ₱ 38.03 |
| Packaging | Pack/Fill | Content per Packaging | Production Cost/ Total Landed Cost | Excise Tax | VAT | Total Tax | Floor Price |
|---|---|---|---|---|---|---|---|
| Pod | 1 | 2ml | ₱ 74.57 | ₱ 104.00 | ₱ 125.43 | ₱ 200.00 | ₱ 200.00 |
| Pod | 1 | 4ml | ₱ 108.94 | ₱ 208.00 | ₱ 38.03 | ₱ 38.03 | ₱ 38.03 |
Selling of tobacco products at a price lower than the combined Excise and ValueAdded Taxes imposed under the law shall be prohibited. The seller of such products shall be punished with the corresponding fine under the pertinent provisions of the 1997 National Internal Revenue Code, as amended.
The Joint Administrative Order (JAO) No. 22-01, Series of 2022 expressly states: “ECommerce platforms, e-marketplaces, and the like shall verify if the goods sold by online sellers or merchants, and e-retailers, in their respective platforms are regulated, prohibited, original, genuine, licensed, or unexpired.”
Any violation of the floor prices prescribed above shall be subject to the corresponding penalties under the pertinent provisions of the 1997 NIRC, as amended, to wit:
(i) “SEC. 145. Cigars and Cigarettes: – xxx
“Selling of tobacco products at a price lower than the combined excise and
value-added taxes imposed under the law shall be prohibited. The seller of
such products shall be punished with a fine of not less than ten (10) times
the amount of excise plus value-added taxes due but not less than Two
hundred thousand pesos (₱200,000.00) nor more than Five hundred
thousand pesos (₱500,000.00), and imprisonment of not less than four (4)
years but not more than six (6) years.”
(ii) “SEC. 254. Attempt to Evade or Defeat Tax. – Any person who willfully
attempts in any manner to evade or defeat any tax imposed under this Code
or the payment thereof shall, in addition to other penalties provided by law,
upon conviction thereof, be punished by a fine not less than Five hundred
thousand pesos (₱500,000) but not more than Ten million pesos
(₱10,000,000) and suffer imprisonment of not less than six (6) years but
not more than Ten (10) years: Provided, That the conviction or acquittal
obtained under this Section shall not be a bar to the filing of a civil suit for
the collection of taxes.”
(iii) “Sec. 263-A. Selling of Heated Tobacco Products and Vapor Products at
a Lower Price than the Combined Excise and Value-added Taxes. — Any
person who sells 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 ten (10) times the amount of excise tax plus value-added tax
but not less than One hundred thousand pesos (₱100,000.00), and
imprisonment of not less than two (2) years but not more than four (4) years.
In addition to the above penalties, the provisions of Sections 263 and 265 of the 1997 NIRC as amended, shall likewise be applied.
Furthermore, Sec. 13 of JAO No. 22-01, Series of 2022, provides: “E-Commerce platforms, e-marketplaces, and the like, shall be treated, and shall be held liable, in the same manner as online sellers, merchants, and e-retailers, when the latter commits any violation of the laws implemented by these rules.”