TAXATION
BIR sets higher base prices for cigarettes, vaping products
The Bureau of Internal Revenue (BIR) has announced an increase in the minimum retail prices for cigarettes and various vape products, effective based on new revenue regulations released on July 18. This adjustment marks an update to the floor prices last set in September.
The BIR’s established minimum retail prices are designed to account for estimated excise taxes, value-added taxes, and a reasonable production cost, as noted by the National Tax Research Center.
For cigarettes, the new floor price per pack has been set at P85.57, an increase from the previous P78.58. The assumed production cost for cigarettes has also been raised to P10.25 per pack, up from P7.16. Consequently, the floor price for each ream (10 packs) is now P855.68, compared to the earlier P785.80, with a production cost estimate of P102.50, an increase from P71.60.
Regarding heated tobacco products, the floor price per 20-piece pack has been adjusted to P61.47, a slight rise from P60.11. Interestingly, the production cost assumption for these products saw a minor decrease to P19.04 from P19.54 in September.
For vaporized nicotine products, the BIR has set new floor prices across different formats:
- A 2-milliliter (ml) nicotine pod now has a floor price of P353.18, a significant jump from P180.67. The production cost assumption for these pods increased to P200.68 from P52.11.
- Disposable pods with 10 ml content are now priced at a minimum of P183.31.
- Prefilled pods (10 ml content) have a new floor price of P174.89.
- Disposable devices (10 ml content) are now set at P98.18.
These adjustments come as the BIR reports robust collections from tobacco and vapor products. Excise taxes on tobacco products reached P58.97 billion in the first half of the year, marking a 34.16% increase year-on-year. Collections for vapor products saw an even more dramatic rise, surging by 738.09% to P1.50 billion during the same period.
The new regulations are set to take effect fifteen days following their publication in the Official Gazette or on the BIR’s official website, whichever occurs first.
