RMC No. 89-2014: Clarifies the implementation of the increase in Excise Tax rates on locally-manufactured cigarettes effective January 1, 2015 in relation to the new Internal Revenue Stamps

Summary

RMC No. 89-2014 clarifies how the increase in Excise Tax rates on locally manufactured cigarettes effective January 1, 2015 applies in relation to the new Internal Revenue Stamps under RR No. 7-2014, as amended.

Key points

1. Differential tax payment. Local cigarette manufacturers compute and pay the difference between the new and current tax rates, by tax classification of their products. The base is the number of stamps in their possession as of December 31, 2014, whether or not actually affixed to packs.
2. Payment date. The total Excise Taxes are paid to the BIR not later than the last working day of December, 2014.
3. Physical inventory. To validate the payment, authorized BIR representatives conduct a physical inventory of all stamps held by manufacturers as of December 31, 2014, whether or not affixed to packs. Any discrepancy between payment and inventory results leads to assessment and collection of the deficiency Excise Tax upon demand.
4. IRSIS update. The Internal Revenue Stamp Integrated System (IRSIS) database is then updated to the new tax rates for stamps previously issued and paid at the current rates, by price classification of cigarettes.

Who is affected

• Local manufacturers of cigarettes

Deadlines and effectivity

• New Excise Tax rates: effective January 1, 2015
• Payment: not later than the last working day of December, 2014
• Stamp inventory count: as of December 31, 2014

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