Philippine BIR Prohibits Vape Cigarette Sale Below Floor Price

Revenue Regulation No. 16-2024 Updates Floor Prices, Warns of Criminal Liabilities

The Bureau of Internal Revenue (BIR) has issued a statement prohibiting the sale of vapor products, cigarettes, and heated tobacco products below the floor price set by the taxman, which results from combined excise and value-added taxes. Internal Revenue Commissioner Romeo Lumagui Jr. issued Revenue Regulation No. 16-2024 (RR No. 16-2024) to update the floor prices of these products.

Lumagui reminded e-marketplaces, online sellers, retail sellers, and distributors of tobacco products of the criminal liabilities they face if they sell such products below the mandated floor price. He emphasized that selling these items below the floor price constitutes a criminal violation punishable by imprisonment for the seller.

“We are monitoring both online platforms and brick-and-mortar stores. Do not sell below the floor price. Take down all posts and offerings that are below the floor price,” Lumagui warned.

floor price for subject tobacco products

Updated floor prices for vapor products, cigarettes, and heated tobacco products under RR No. 16-2024

Criminal Liabilities for Selling Below Floor Price

According to the BIR, Section 145 (C) of the National Internal Revenue Code (NIRC), as amended, prohibits the sale of tobacco products at a price lower than the combined excise and value-added taxes imposed under the law. Sellers who violate this provision face a fine of not less than 10 times the amount of excise plus value-added taxes due, but not less than P200,000 nor more than P500,000, and imprisonment of not less than four years but not more than six years.

Section 263 (A) of the NIRC, as amended, also provides that any person who sells heated tobacco products and vapor products at a price lower than the combined excise and value-added taxes shall be punished with a fine of 10 times the amount of excise tax plus value-added tax, but not less than P200,000, and imprisonment of not less than four years but not more than six years.

The BIR’s statement serves as a stern warning to sellers of tobacco products, emphasizing the importance of adhering to the mandated floor prices to avoid criminal liabilities. The updated floor prices aim to ensure that these products are not sold at prices that undermine the government’s efforts to regulate their sale and consumption.

News source:

BIR bars sale of vape, cigarettes, heated tobacco below floor price

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

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Matthew Ma

Marketing at Ecigator

With over a decade of experience in the e-cigarette industry, Matthew Ma is a seasoned expert in both the manufacturing and usage aspects of vaping products. His extensive background has provided him with a deep understanding of the intricacies and evolving dynamics of e-cigarettes.