Cigarettes, e-cigarettes, vapes, and alcoholic beverages are all getting more expensive again as another round of excise tax hikes come into effect this year as the government seeks to increase collections of these “sin” products amid a pandemic-induced decline.
Under Republic Act No. 11346 or the Tobacco Tax Act of 2019, the excise duty on cigarettes will increase from P45 per pack last year to P50 per pack effective January 1, 2021.
For e-cigarettes, RA No. 11467, signed by President Duterte last year, will impose an excise duty of P27.50 for each pack of heated tobacco products in 2021, from P25 per pack in 2020.
Also under RA 11467, the excise tax rate for conventional Freebase vapor products will increase from P45 per ml in the previous year to P50 per milliliter.
For salt-nicotine vapes, the rate increases from P37 per ml in the previous year to P42 per ml.
For distilled spirits, the excise tax will increase from P42 per proofliter in 2020 to P47 per proofliter.
Fermented liquors are also hit with a higher excise tax of P37 per liter in 2021 from P35 per liter last year.
The Bureau of Internal Revenue (BIR) is issuing new tax stamps or an “integrated integrated system for internal tax stamps”, which will continue to be issued by the state-run APO Production Unit, to improve the collection and fight against illegal trade.
BIR officials had said that these upcoming stamps would have new security features as previous tax stamps could be forged, resulting in lost revenue for the government.
Alcoholic beverages and e-cigarettes will soon also have internal tax stamps.
The trade in counterfeit and smuggled cigarettes flourished amid the pandemic, especially when supplies dwindled during the strict lockdown that restricted circulation of unnecessary goods. Affected by the recession, consumers also turned to cheaper alternatives.
From January to September 2020, the consumption tax collections for tobacco, e-cigarettes and alcohol decreased from 180 billion pesetas in the previous year to 166.5 billion pesetas.
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