RR No. 18-2021: Prescribes the Consolidated Revenue Regulations on the affixture of Internal Revenue Stamps on imported and locally manufactured cigarettes, heated tobacco products and vapor products for domestic sale or for export and the use of the Enhanced Internal Revenue Stamp Integrated System (Enhanced IRSIS) for the ordering, distribution, monitoring, report generation and incorporating the strict supervision of production, release, affixture, inventory and sale of cigarettes

Summary

RR No. 18-2021 consolidates the rules on affixing internal revenue stamps to cigarettes, heated tobacco products and vapor products, and on using the Enhanced Internal Revenue Stamp Integrated System (Enhanced IRSIS) for ordering and monitoring stamps.

Key points

1. Enrollment and ordering. Importers and local manufacturers file a letter of intent with the Chief, Excise LT Field Operations Division (ELTFOD), with a notarized Board Resolution or a Special Power of Attorney, then enroll through the BIR website. Orders go only through the stamp ordering module, and orders submitted on or before 12:00 NN are processed the same working day.
2. Payment and release of stamps. The Excise Tax due on the stamps ordered must be paid before approval, through the eFPS where applicable. Stamps cost ₱0.20 per piece, paid to APO, and APO releases them within fifteen (15) calendar days from BIR approval of the order.
3. Exports. Export products must meet labelling and proof of shipment rules, and export-zone locators must meet added requirements. A manufacturer-exporter pays ₱0.04 per stamp, which counts as constructive affixture, or posts an export or transfer bond under Republic Act No. 11346.
4. Spoiled and defective stamps. Spoiled or bad order stamps are surrendered to the BIR within six (6) months from APO release for local manufacturers, and within ten (10) months from receipt for importers. Replacement is not allowed for late surrender, unaccounted stamps, or stamps without a verifiable UIC or QR Code.
5. Reports and surveillance. Reports on affixture, removal and spoiled or lost stamps are filed through the Enhanced IRSIS within set deadlines. The BIR conducts on-the-spot surveillance with mobile verification devices, and unstamped products are presumed withdrawn without payment of Excise Tax.
6. Penalties and transition. Violations carry Excise Tax assessment with penalties, plus the Section 265 fine of not less than ₱10,000,000.00 but not more than ₱500,000,000.00 and imprisonment of five (5) to eight (8) years. Cumulative possession of false, counterfeit or recycled stamps over ₱50,000,000.00 carries a higher penalty.

Who is affected

• Importers and local manufacturers of cigarettes, heated tobacco products and vapor products
• Manufacturer-exporters and Special Economic and Freeport Zone locators

Deadlines and effectivity

• New stamps on locally manufactured products: no later than October 1, 2021
• New stamps on imported and all products: effective January 1, 2022
• Monthly reports: no later than November 15, 2021

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