INTERNAL Revenue Commissioner Kim Jacinto-Henares has ordered cigarette companies to pay the increased excise-tax rates on every pack of cigarettes based on the number of revenue stamps in their possession as of December 31.
Henares issued Revenue Memorandum Circular (RMC) 89-2014, mandating cigarette companies to compute the additional taxes due on cigarette withdrawals, based on the number of revenue stamps in their possession by the said date, in view of the mandated increase in excise-tax rates on cigarettes effective January 1, 2015.
“In light of the impending increase of excise-tax rates on cigarettes effective January 1, 2015, there is an immediate need to determine the differential increase between the new tax rates and the current tax rates on both locally manufactured low-priced and high-priced brands of cigarettes, which were actually paid under Revenue Regulations 7-2014, as amended, requiring the prior payment of excise taxes due thereon on purchases of internal-revenue stamps,” RMC 89-2014 said.
“Accordingly, all local manufacturers of cigarettes shall compute and pay the differential increase between the new tax rates and the current tax rates, according to the tax classification of their cigarette products, based on the number of internal-revenue stamps, whether actually affixed to the packs of cigarettes, being held in their possession as of December 31, 2014,” the circular said.
Payments on the additional excise taxes due, based on the number of revenue stamps in the possession of the cigarette companies, shall be due not later than the last working day of December, which is December 29.
According to the Sin-Tax Reform Act of 2012, cigarette packs with a net retail price of P11.50 and below shall be imposed a P21-excise tax per pack, while cigarette packs with a net retail price of more than P11.50 will be imposed a P28-excise tax per pack, starting January 1, 2015.
Henares also ordered the Bureau of Internal Revenue (BIR) to validate the additional excise-tax payments by conducting a physical inventory of all revenue stamps in the possession of all manufacturers as of December 31.
The new revenue stamps were launched earlier this year as the Internal Revenue Stamps Integrated System project. This sought to enable the BIR to more effectively monitor the removal of cigarette packs from the warehouses of manufacturers and ensure that they have paid the correct taxes on such cigarette packs that are removed into the market.
According to BIR’s figures, excise taxes on tobacco products collected from January to September amounted to P64.96 billion, or 90.17 percent above the actual collection target in excise taxes for the period.