RR No. 16-2024 — Prescribing the updated floor price of Cigarette, Heated Tobacco, and Vapor Products pursuant to Sections 144 (B) and (C) and 145 (C) of the NIRC of 1997, as amended (Date Posted: September 17, 2024)

@R) RECOROS MANAGEMENT DIVESION REPUBLIC OF THE PHILIPPINES .

I F::i T. BUREAU OF INTERNAL REVENUE DEPARTMENT OF FINANCE SEP 1 8 2027

ILCLIVLL SFP 16 2024 SEP: b zut admin unit Iifvi Zo3 pW

REVENUE REGULATIONS NO. 0 1 6 - 2 0 2 4

SUBJECT Prescribing the Updated Floor Price of Cigarette, Heated Tobacco and Vapor Products Pursuant to Sections 144 (B) and (C) and 145 (C) of the NIRC of 1997, As Amended

TO All Internal Revenue Officers and Others Concerned

SECTION 1. SCOPE. - Sections 144 (B) and (C), and 145 (C) of the National Internal Revenue Code (NIRC) of 1997, as amended by Republic Act (RA) Nos. 11346 and 11467, in relation to relevant provisions of RA No. 11900, or the "Vaporized Nicotine and Non-Nicotine Products Regulation Act," mandate the Bureau of Internal Revenue (BIR) to prescribe the floor price of Cigarettes, Heated Tobacco Products, and Vapor Products.

Pursuant to the provisions of Sections 244 and 245 of the NIRC of 1997, as amended, these 2023, which revised the floor prices set forth in Section 6 of Revenue Regulations (RR) No. 14-2022 and RMC No. 79-2022. Regulations are hereby promulgated in order to update the floor price of Cigarette, Heated Tobacco, and Vapor Products prescribed in Revenue Memorandum Circular (RMC) No. 49

phrases listed hereunder are defined as follows: SECTION 2. DEFINITION OF TERMS. -- For purposes of these regulations, the words and

E-marketplace - refers to an online intermediary that allows participating merchants to exchange information about products or services to enter into an electronic commerce transaction.

brand per tobacco product and the sum of the excise tax and VAT. Floor Price -- refers to the minimum price of cigarette, heated tobacco and vapor products per unit, which shall be equivalent to the total reasonable production cost/expenses of the cheapesi

heating tobacco, either electrically or through other means sufficiently to release an aerosol Heated Tobacco Products (HTPs) -- refer to tobacco products that may be consumed through that can be inhaled, without burning or any combustion of the tobacco. Heated tobacco products include liquid solutions and gels that are part of the product and are heated to generate ar aerosol.

It includes online sellers or merchants, or any person or entity selling products or services to Seller -- a person engaged in the business of selling consumer products directly to consumers. customers through an e-marketplace. It shall also include a supplier or distributor if (1) the personnel or maintains common or overlapping officers or directors with the supplier or seller is a subsidiary or affiliate of the supplier or distributor; (2) the seller interchanges

Prescribing the'Updated Floor Price of Cigarette, Heated Tobacco, and Vapor Products Pursuant to Sections 144 (B) and (C) and 145 (C) of the NIRC of 1997, As Amended REVENUE REGULATIONS 1 of 3

control over the selling practices of the seller. distributor; or (3) the supplier or distributor provides or exercises supervision, direction or

(ENDS/ENNDS), which are combinations of (i) a liquid solution or gel, that transforms into an aerosol without combustion through the employment of a mechanical or electronic heating nicotine content. Vapor Products -- shall mean Electronic Nicotine and Non-Nicotine Delivery systems element, battery or circuit that can be used to heat such solution or gel, and includes, but is not limited to (ii) a cartridge, (iii) a tank, and (iv) the device without a cartridge or tank. It is commonly known as nicotine salt/salt nicotine, and conventional freebase' or classicj nicotine, and other similar products. All vapor products shall be covered regardless of its

SECTION 3. FLOOR PRICE. - Provided hereunder are the updated floor prices for the subject tobacco products:

A. Cigarettes

Packaging Ream Pack Content per Packaging 20 sticks 10 packs Total Landed Cost Production Cost/ 71.60 7.16 Excise Tax (2024) 630.00 63.00 (1%) VAT 84.20 8.42 Total Tax 714.20 71.42 Floor Price 785.80 78.58

B. Heated Tobacco Products

Packaging Pack Content per Packaging 20 sticks Total Landed Cost Production Cost/ 19.54 Excise Tax (2024) 34.13 12%) VAT 6.44 Total Tax 40.57 Floor Price 60.11

C. Vapor Products

1. Nicotine Salt or Salt Nicotine

Packaging Pod Pack! Fill 1 Content per Packaging 2 ml Landed Cost Cost/ Total Production 52.11 Excise (2024) Tax 109.20 (12%) VAT 19.36 Total Tax 128.56 Floor Price 180.67

Bottle 10 mi 60.36 546.00 72.76 618.76 679.12

2. Conventional Freebase' or Classic' Nicotine

Packaging Bottle Bottle Pack! Fill Content per Packaging 30 ml 10 ml Landed Cost Production Cost/ Total 46.47 99.25 (2024) Excise Tax 189.00 63.00 (12%) VAT 28.26 19.47 Total Tax 217.26 82.47 Floor Price 263.73 181.72

The above floor prices shall only be used as reference for taxation purposes in the absence of other documents/proof as to the actual price of the product that is higher than the identified floor price

SECTION 4. PENALTIES. - Selling of tobacco products at a price lower than the combined excise and value-added taxes imposed under the law shall be prohibited.

Prescribing the Updated Floor Price of Cigarette, Heated Tobacco, and Vapor Pra Huc Pursuant to Sections 144 (B) and (C) and 145 (C) of the NIRC of 1997, As Ame REVENUE REGULATIONS 2 of 3 TBUREAU OF INTERNALREVENUE ERECORDS MANAGEMENT DIVISION * SFD1702 N

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BY: Admin unit-- 1 TIME 7pr

Under Section 145 (C) of the NIRC of 1997, as amended, the seller of such products shall be punished with a fine of not less than ten (10) times the amount of excise plus value-added taxes due but not less than Two hundred thousand pesos (P200,000.00) nor more than Five hundred pesos (P500,000.00), and imprisonment of not less than four (4) years but not more than six (6) years.

shall be punished with a fine of not less than ten (10) times the amount of excise tax plus value- not more than six (6) years. Under Section 263-A of the same Code, as amended, any person who sells heated tobacco products and vapor products at a price lower than the combined excise and value-added taxes added tax due but not less than Two hundred thousand pesos (P200,000.00) nor more than Five hundred thousand pesos (P500,000.00), and imprisonment of not less than four (4) years but

SECTION 5. REPEALING/AMENDATORY CLAUSE. - All existing rules, regulations. are hereby repealed, amended or modified accordingly. issuances or parts thereof contrary to or inconsistent with the provisions of these Regulations

hereof shall remain in full force and effect. subsequently declared unconstitutional or invalid, the validity of the remaining provisions SECTION 6. SEPARABILITY CLAUSE. - If any of the provisions of these Regulations is

SECTION 7. EFFECTIVITY. - These Regulations shall take effect fifteen days following the publication thereof in the Official Gazette or the BIR's official website, whichever comes first.

RAIPH G.RE sedretary df Finance AUG 2 7 2024

Recommending Approval:

RO J.LUMAGUI, JR. G BUBEAU OE INtERNAL RFVFNUE RECORDS MANAGEMENT DIVISION

Kissioner of Internal Revenue

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Y ADMIN uNIt. ITiME: _205 pu

OHREA, LTS-Excise/rrie

Prescribing the Updated Fioor Price of Cigarette, Heated Tobacco, and Vapor Products Pursuant to Sections 144 (B) and (C) and 145 (C) of the NiRC of 1997, As Amended REVENUE REGULATIONS 3 of 3