REVENUE REGULATIONS NO. 7-2021 issued on May 18, 2021 prescribes the
rules and regulations to implement the provisions of Republic Act (RA) Nos. 11346
and 11467 relative to the Excise Tax on alcohol products, tobacco products, heated
tobacco products, vapor products and disposition of Excise Tax collection.
The Revised Rates and Bases of Excise Taxare as follows:
A. Alcohol Products
i. Distilled Spirits
ExciseTaxDue=AdValoremTax+SpecificTax
Date of Effectivity
(start date)
Ad Valorem Tax
[based on the net retail
price per proof
(excluding the excise
and value-added taxes)]
Specific Tax
(per proof liter)
January 1, 2020 20% ₱ 24.34
January 23,2020 22% ₱42.00
January 1, 2021 22% ₱47.00
January 1, 2022 22% ₱52.00
January 1, 2023 22% ₱59.00
January 1, 2024 22% ₱66.00
2025 Onwards 22% specific tax rate shall be
increased by 6% and
every year thereafter
ii. Wines
Date of Effectivity
(start date)
Specific Tax
(per proof liter)
January 1, 2020
Sparkling wines/champagnes where the
NRP(excluding the excise and VAT) per bottle of
750 ml volume capacity, regardless of proof is:
a. Php 500 or less
b. More than Php 500
₱ 328.98
₱ 921.15
Still wines and carbonated wines containing 14%
ofalcohol by volume or less
Still wines and carbonated wines containing
morethan 14% of alcohol by volume but not more
than 25%of alcohol by volume
Fortified wines containing more than 25% of alcohol
by volume
₱ 39.48
₱ 78.96
Taxed as distilled spirits
January 23,2020* ₱ 50.00
January 1, 2021 ₱ 53.00
January 1, 2022 ₱ 56.18
January 1, 2023 ₱ 59.55
January 1, 2024 ₱ 63.12
2025 Onwards specific tax rate shall be
increased by 6% and
every year thereafter
Note: *Beginning January 23, 2020, the classification of wines was removed
pursuant to RA No. 11467. All types of wines are subject to specific Excise Tax
rates per liter.
iii. Fermented Liquors
Date of Effectivity
(start date)
Specific Tax
(per proof liter)
January 1, 2020 ₱ 26.43
January 23, 2020 ₱ 35.00
January 1, 2021 ₱ 37.00
January 1, 2022 ₱ 39.00
January 1, 2023 ₱ 41.00
January 1, 2024 ₱ 43.00
2025 Onwards specific tax rate shall be increased by
6% and every year thereafter
B. Tobacco Products, Heated Tobacco Products and Vapor Products
i. Heated Tobacco Products
Date of Effectivity Quality Excise Tax Rate
January 1, 2020
Per pack of 20 units or any
packaging combinations of
not more than twenty (20)
units
₱ 10.00
January 23,2020 ₱ 25.00
January 1,2021 ₱ 27.50
January 1,2022 ₱ 30.00
January 1,2023 ₱ 32.50
2024 Onwards specific tax rate shall
be increased by 5%
every year effective
January 1, 2024
ii. Vapor Products
Date of Effectivity Quality Excise Tax Rate
January 1, 2020 to
January 22, 2020
0.00 ml to 10.00 ml ₱ 10.00
10.01 ml to 20.00 ml ₱ 20.00
20.01 ml to 30.00 ml ₱ 30.00
30.01 ml to 40.00 ml ₱ 40.00
40.01 ml to 50.00 ml ₱ 50.00
More than 50.00 ml
₱ 50.00 plus ₱ 10.00
for every additional
10.00 ml
a. Nicotine Salt or Salt Nicotine
Date of Effectivity Quality Excise Tax Rate
January 23, 2020
Per milliliter or a fraction
thereof
₱ 37.00
January 1, 2021 ₱ 42.00
January 1, 2022 ₱ 47.00
January 1, 2023 ₱ 52.00
2024 Onwards
rate shall be
increased by 5%
every year effective
January 1, 2024
b. Conventional ‘Freebase’ or ‘Classic’ Nicotine
Date of Effectivity Quality Excise Tax Rate
January 23, 2020
Per ten (10) milliliter or a
fraction thereof
₱ 45.00
January 1, 2021 ₱ 50.00
January 1, 2022 ₱ 55.00
January 1, 2023 ₱ 60.00
2024 Onwards
rate shall be
increased by 5%
every year effective
January 1, 2024
The rates of tax imposed herein shall apply to any liquid substance,
regardless of nicotine content, including nicotine-free liquid or any similar
product.
iii. Cigars and Cigarettes
a. Cigars [Excise Tax = Ad Valorem Tax plus (+) Specific Tax]
Date of Effectivity Ad Valorem Tax
Rate is based on the net
retail price per cigar
(excluding the excise and
value-added taxes)
Add:Specific Tax
January 1, 2020 20% ₱ 6.57
January 1, 2021 20% ₱ 6.83
January 1, 2022 20% ₱7.10
January 1, 2023 20% ₱7.38
2024 Onwards 20%
rate shall be
increased by 5%
every year effective
January 1, 2024
b. Cigarettes packed by hand
Date of Effectivity Quality Excise Tax Rate
January 1, 2020
Per pack of 20s or any
packaging combinations of
not more than 20 packed
by hands
₱ 45.00
January 1, 2021 ₱ 50.00
January 1, 2022 ₱ 55.00
January 1, 2023 ₱ 60.00
2024 Onwards
rate shall be
increased by 5%
every year effective
January 1, 2024
c. Cigarettes packed by machine
Date of Effectivity Quality Excise Tax Rate
January 1, 2020
Per pack of 20s or any
packaging combinations of
not more than 20 packed
by machine
₱ 45.00
January 1, 2021 ₱ 50.00
January 1, 2022 ₱ 55.00
January 1, 2023 ₱ 60.00
2024 Onwards rate shall be
increased by 5%
Date of Effectivity Quality Excise Tax Rate
every year effective
January 1, 2024
The labels and/or packages of products shall comply with the following:
a. Duly registered cigarettes packed by hand, cigarettes packed by machine
and heated tobacco products shall only be packed in twenties and other
packaging combinations of not more than twenty (20) units.
b. 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. 11346 and 11467, the
Graphic Health Warnings Law, and relevant rules and regulations.
c. 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.
d. 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 156 of the National Internal
Revenue Code (NIRC), as amended, and RR Nos. 03-2006 and 17-2012,
as amended, and other relevant revenue issuances.
e. 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 Department of Health, as well as under existing revenue
issuances.
For standard affixing of stamps and appropriate payment of Excise
Tax, vapor products shall be packed as follows:
i. Nicotine salt – 1 ml or less, 2 ml or less, 3 ml or less, 4 ml or less, 5 ml
or less, 7 ml or less and maximum of 10 ml per pod.
ii. Freebase – 10 ml or less, 20 ml or less, 30 ml or less, 40 ml or less,
50 ml or less,70 ml or less and maximum of 100 ml per pack.
Higher product packaging or packaging with no corresponding
equivalent will use a combination of two stamps.
No tobacco products, heated tobacco products, or vapor
productsmanufactured 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.
Tobacco products, heated tobacco products, or vapor products imported
intothe Philippines and destined for foreign countries shall not be allowed entry
without posting a bond equivalent to the amount of customs duty, Excise and ValueAdded Taxes due thereon if sold domestically.
For inspection/s made in accordancewith this Chapter, there shall be
collecteda fee detailed as follows:
Product Inspection
Fee
Unit of Measure
Pieces/Sticks/
Units Milliliter Kilo
Cigars ₱ 0.50 1,000 or fraction
thereof
Cigarettes ₱ 0.10 1,000 or fraction
thereof
Heated Tobacco ₱ 0.10 1,000
Vapor Products ₱ 0.01 1.00
Whole Leaf
Tobacco
₱ 0.02 1.00 or fraction
thereof
Scrap and Other
Mfd. Tobacco
₱ 0.03 1.00 or fraction
thereof
Manufacturers, indentors, wholesalers and importers of any apparatus or
mechanical contrivance specially for the manufacture of articles subject 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 fromthe
Commissioner and/or Authorized Representative.
A written permit from the Commissioner/Authorized Representativefor
importing, manufacturing or selling of apparatus or mechanical contrivance specially
for the manufacture of articles subject to Excise Tax, cigarette paper in bobbins or
rolls, cigarette tipping paper or cigarette filter tips is required before any person shall
engage in the importation, manufacture or sale of the said articles. No permit to sell
said articles shall be granted unless 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 articles and the disposal thereof by saleof persons
withtheirrespective addresses asapprovedby the Commissioner/Authorized
Representative, shall be kept by the seller, and records, showing stock of said
articles andconsumption thereof, shall be kept by the buyer, subject to inspection by
internal revenue officers.
The minimum floor 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 Excise LT Regulatory Division
(ELTRD) shall establish a monthly data profile based on the required periodic
manufacturer’s or importer’s sworn declaration for all brands per tobacco product
category.
Any alcohol products, tobacco products, heated tobacco products and vapor
products that are introduced in the domestic market on or after theeffectivity of any
law imposing new tax rates shall be initially classified for tax purposes according to
their suggested net retail prices as declared in the prescribed updated
manufacturer’s orimporter’s sworn statement,subject to theinitial validation and
revalidation requirements prescribed under RR No. 3-2006, as amended.
In case of alcohol 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 longer classified under the new law shall be deemed as newlyintroduced products in the domestic market. The tax classification thereof shall be
based on the suggested net retail price declared in the aforesaid sworn statement,
subject to the initial validation and revalidation requirements.
The understatement of the suggested net retail price by as much as fifteen
percent (15%) of the actual net retail price, as determined using the survey price
net ofExcise and Value-Added Taxes declared permanufacturer/importer’s sworn
statement, shall render the manufacturer or importer of covered products per RA
No. 11346 and 11467 liable for additional Excise and Value-Added Taxes
equivalent to the difference between the recomputed (Excise and Value-Added)
Taxes based on the annual net retail price and the declared Excise and ValueAdded Taxesper submitted sworn statement.
Within 30 days from the effectivity of RA No. 11467, and within the first five (5)
days of every month thereafter, manufacturers, brewers, distillers, distributors,
andimporters 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 particularbrand 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 shall, upon final findings by the Commissioner that the violation was
committed, be penalized by a summary cancellation or withdrawal of permit to
engage in business as manufacturer, brewer, distiller, distributor, or importer of
alcohol products, and/or tobacco, heated tobacco products and vapor products.
The BlR shall supervise establishments where articles subject to Excise Tax
are made or kept. The Secretary of Finance shall prescribe rules and regulations in
which the process of production shall be conducted insofar as may be necessary to
secure a sanitary output and to safeguard revenue, such rules and regulations to
safeguardrevenue may allow the appointment of third parties to monitor production
and removal processes and volumes, and the exclusion of excisable goods from
duty-free barter transactions.
Any corporation, association or partnership 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 liable for any of the acts or
omissions prohibited under Sections 141, 142, 143, 144 or 145 of the NIRC, as
amended, shall be criminally liable and penalized underSection 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.If the
offender is not a citizen of the Philippines, he/she shall be deported immediately after
serving the sentence, without further proceedings for deportation.
It shall be unlawful for any person to have in his possession cigarette paper in
bobbins or rolls, cigarette tipping paper orcigarette 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 (₱1,500,000.00) but not more than Fifteen
Million pesos (₱15,000,000.00) and imprisonment for a term of not less than six (6)
years and one (1) day but not more than twelve (12) years.
Any violation of Section164 of the NIRC, as amended, including mere
possession of any apparatus ormechanical contrivance for the manufacture of
cigarettes, cigarette paper, or cigarette tipping paper, for which no permit was
obtained from the Commissioner shall be punishable with a fine of not less than
Fifteen Million pesos (₱15,000,000.00) but not more than Fifty Million pesos
(₱50,000,000.00) and imprisonment of not less than twelve (12) years but not more
than twenty (20) years.
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 (10) times the amount of
Excise Tax plusValue-Added Tax 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.
Any person who ships, transports or removes spirituous, compounded or
fermented liquors, wines or any manufactured products of tobacco under any other
than the proper name or brand known to the trade as designating the kind and
quality of the contents of the package containing the same or as an imitation of any
existing or otherwise known product name or brand or causes such act to be done
shall, upon conviction for each act or omission, be punished by a fine of not less than
One Million Five Hundred Thousand pesos (₱1,500,000.00) but not more than
FifteenMillion pesos (₱15,000,000.00) and imprisonment of not less than six (6)
years andone (1) day but not more than twelve (12) years.
Any person who owns and/or is found in possession of imported articles
subject to Excise Tax, the tax on which has not been paid in accordance with law, or
any person who owns and/or is found in possession of imported tax-exempt articles
other than those to whom they are legally issued shall be imposed penalties
specified in Section VI (E) of the regulations.
Anyperson who commits any of the actsenumerated hereunder shall,upon
conviction thereof, be punished by a fine of not less than Ten Million pesos
(₱10,000,000.00) but not more than Five Hundred Million pesos (₱500,000,000.00)
and imprisonment of not less than five (5) years but not more than eight (8) years:
a. Making, importing, selling, using or possessing without express authority
from the Commissioner, any dye for printing or making stamps, labels,
tags or playing cards;
b. Reusing previously affixed stamps, erasing the cancellation marks of any
stamp previously used, or alteringthe written figures or letters or
cancellation marks on internal revenue stamps;
c. Possessing false, counterfeit, restored or altered stamps, labels or tags or
causing the commission of any such offense by another;
d. Selling or offering for sale any box or package containing articles subject
to Excise Tax with false, spurious or counterfeit stamps or labels or selling
from any such fraudulent box, package or container as aforementioned; or
e. 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 Million pesos (₱50,000,000.00) shall be punishable by a fine of
FiveHundred Million pesos (₱500,000,000.00) or up to ten (10) times the value of the
illegal stamps seized, whichever is higher, and imprisonment of not less than ten
(10) years but not more than fifteen (15) years.
Upon the effectivity of RA No. 11467, the following transitory provisions shall
be strictly observed by all concerned:
a. Distilled spirits introduced in the domestic market after the effectivity of RA
No. 11467 shall be initially taxed according to their suggested net retail
prices.
b. At the end of three (3) months from the product launch, the BIR, through
the Excise LT Regulatory Division (ELTRD), shall validate the suggested
net retail price of the new brand against the net retail price as defined in
the regulations. After the end of nine (9) months from such validation, the
ELTRD 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.
c. Manufacturers and importer of distilled spirits and wines, and every
brewer, manufacturer or importer of fermented liquor shall, within thirty
(30) days from the effectivity of RA No. 11467, and within the first five (5)
days of every third month thereafter, submit to the Commissioner, through
the Large Taxpayers Performance Monitoring & Programs
Division(LTPMPD), a sworn statement of the volume of sales and
removals for each particular brand of distilled spirits, wines and fermented
liquor sold at his establishment for the three-month period immediately
preceding.
d. i)Manufacturers and importers of cigars and cigarettes shall within thirty
(30) days from the effectivity of RA No.11346(which is January 1,
2020) and within five (5) days of every month thereafter, submit to the
Commissioner through Excise LT Field Operations Division (ELTFOD)
copy furnished LTPMPD a sworn statement of the volume of sales
and removals for cigars and/or cigarettes for the three-month period
immediately preceding.
ii) Manufacturers, distributors and importers of heated tobacco and
vapor products shall register with the BIR through ELTRD, within thirty
(30) days from effectivity of RA No. 11346/11467 and/or from the
issuance of the FDA Marketing Authorization and within five (5) days
of every month thereafter, submit to the Commissioner through
ELTFOD and LTPMPD a sworn statement of the volume of sales for
each particular brand of heated/vapor products sold for the threemonth period immediately preceding.
iii) During the eighteen (18) months period from effectivity of the
Implementing Rules and Regulations (IRR) of RA No. 11346 and
11467, taxpayers shall first secure a certification from the FDA
reflecting 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.
e. Manufacturers, distributors, importers and sellers of heated tobacco
products and vapor products are given a period of eighteen (18) months
from the effectivity of the IRR of RA Nos. 11346 and 11467 to comply with
the requirements of. the Graphic Health Warnings Law, its IRR, and all
other relevant rules and regulations in relation to the implementation of
the Graphic Health Warning Law.
f. Eighteen (18) months after the effectivity of the IRR of RA Nos.11346 and
11467, 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, packaging, as well as any other container
used in displaying the said products, under appropriate revenue
issuances by the Bureau.
Revenues from sugar sweetened beverages, alcohol, tobacco, heated
tobacco and vapor products shall beallocated in accordance with RA No. 11346 for
revenues collected from January 1 to 22, 2020 and RA No. 11467 from January 23,
2020onwards.The methodology and all 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 created under RA No. 8240.
The Revenue Regulations specifically repeals Section 4 and 6 of RR No. 17-
2012 and Revenue Memorandum Circular No. 90-2012. Any other laws, decrees,
executive orders, rules and regulations or parts thereof which are contrary to or
inconsistent with these Regulations are hereby repealed, amended, or modified
accordingly.