BOC implements updated excise taxes for alcohol, tobacco, cigarettes

• The Bureau of Customs has started implementing updated excise taxes on alcohol, tobacco and cigarettes

• The updated rates were adopted in BOC’s Electronic-to-Mobile System on January 4

• The adjustments are in compliance with Republic Act No. 11346 and RA No. 11467

Updated excise tax rates on alcohol, tobacco and cigarette products are now being implemented in the Bureau of Customs (BOC) Electronic-to-Mobile (E2M) system.

In separate memos, both dated January 3, BOC Management Information System and Technology Group (MISTG) officer-in-charge deputy commissioner Kriden Balgomera said the updated rates were adopted on the E2M effective January 4.

MISTG Memo No. 01-2024 implements the updated excise tax rates on cigarette products under Republic Act (RA) No. 11346 while MISTG Memo No. 02-2024 covers the updated excise tax rates for alcohol, tobacco, and vapor products under RA No. 11467.

RA 11346, signed in July 2019, increased the excise taxes on tobacco products and made subject to excise taxation and regulation heated tobacco products (HTP), and vapor products or popularly known as e-cigarettes. Implementation began in 2020 with the yearly indexation of the specific tax rates of cigars rising from 4% to 5% effective January 1, 2024 while retaining the 20% ad valorem rate.

Rates for cigarettes and HTPs are also set to increase by 5% every year starting 2024. For vapor products, the excise tax increased 5% yearly beginning 2021.

RA 11467, signed in January 2020, increased and simplified the tax base of the excise tax on alcohol products and amended the imposed taxation on heated tobacco products (HTP) and vapor products under RA 11346. It also imposes a yearly increase in excise tax on alcohol products depending on the type since its implementation, while the automatic indexation rates for all alcohol products will increase from 4% to 6% in 2024.

The higher excise taxes on so-called sin products are intended to raise more revenues to finance the universal health care program being implemented by the state-run Philippine Health Insurance Corp.

The updated excise taxes implemented under MISTG Memo No. 01-2024 are as follows:

• Cigarettes packed by hand and packed by machine – P63 per pack
• Cigar – ad valorem tax of 20% of the net retail price (NRP), specific tax of P7.749
• Unmanufactured tobacco – P2.70
• Chewing tobacco – P2.31

The tax rates implemented under MISTG Memo No. 02-2024 are:

• Fermented liquors specific tax – P43 per liter
• Distilled spirits – ad valorem tax of 22% of NRP, specific tax of P66 per proof liter
• Wine specific tax – P63.12 per liter
• HTP – P34.125 per pack of 20 units or packaging combinations of not more than 20 units
• Nicotine salt or salt nicotine (salt nicotine vape) – P54.60 per ml
• Conventional “freebase” or “classic” nicotine – P63 per 10 ml or a fraction thereof

– Roumina Pablo

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