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Vape manufacturers, take note: BIR enforces excise taxes, stamps by June

By Eileen C. Mencias

Starting June 1, 2024, importers and local manufacturers of vape products will be subject to excise taxes and mandated to affix Bureau of Internal Revenue stamps on their items, according to a new regulation.

BIR Commissioner Romeo Lumagui Jr. said the move aims to regulate the vape industry and generate additional tax revenue for the government.

“The BIR will monitor the internal revenue stamps for the vape industry. If your products do not have any internal revenue stamps by June 1, we will raid your stores and seize the products. Those in possession of the illicit vape products shall be held liable,” he said.

Failing to pay vape taxes comes with a steep price tag: criminal charges and fines up to 10 times the owed amount, Lumagui warned.

BIR Revenue Memorandum Circular No. 59-2024, signed by Lumagui on April 30, 2024, delineates seven categories of container or packaging and their corresponding excise tax rates: code A for 1ml of nicotine salt, taxed at P54.60; code B for 2ml of nicotine salt, taxed at P109.20; code C for 5ml of nicotine salt, taxed at P273; code D for 10ml of nicotine salt, taxed at P546; code E for 10ml of conventional freebase, taxed at P63; code F for 30ml of conventional freebase, taxed at P189; and code G for 60ml of conventional freebase, taxed at P378. These rates will see a five percent annual increase.

Orders for BIR stamps are capped at 165,000 pieces or 1.65 million per container or packaging per order, to be made through a consolidator and released from APO Production Units or APO-designated plants.

From June 1, 2024, locally manufactured vape products cannot be removed from plants unless affixed with fourth generation BIR stamps, and imports won’t be released from customs without the same stamps affixed by the same date.

Since 2022, the BIR has been targeting the illicit vape industry, conducting raids and pressing criminal charges against unlawful vape traders.

In November and December 2022, raids in Manila resulted in back tax claims totaling P1.2 billion. Subsequent raids in March 2024 targeted a warehouse in Laguna, followed by additional raids on warehouses in Manila and Rizal in April this year.

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