RMC No. 18-2002: Circularizes the interpretation by the Supreme Court of the Philippines of the pertinent provisions of Section 140 of the Tax Code of 1997 relative to exemption from specific tax of the sale of stemmed leaf tobacco

Summary

RMC No. 18-2002, issued May 31, 2002, circularizes the Supreme Court’s interpretation of the relevant provisions of Section 140 of the NIRC of 1997 on removals of stemmed leaf tobacco.

Key points

1. Removals by leaf tobacco dealers. All removals of stemmed leaf tobacco by leaf tobacco dealers are subject to the specific tax of P 0.75 per kilogram under Section 144 of the NIRC. The inspection fee under Section 146 of the same Code applies in addition.
2. Exception for L-7 to L-7 deliveries. Removals of the leaf tobacco product by an L-7 (a manufacturer of tobacco products) for delivery to another L-7 are exempt from this specific tax, under the Supreme Court decision.

Who is affected

• Leaf tobacco dealers
• L-7 manufacturers of tobacco products

Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.