BIR to set floor price for vape items, per IRR

Prior to becoming a law, though, government agencies such as the Department of Health and the Department of Education opposed the passage of the Vape bill, saying it could expose more people to the products, the health risks of which have not been fully ascertained. On the other hand, Valenzuela City Mayor Wes Gatchalian, one of the principal authors of the bill, said in July that the new vaping law will provide a much-needed economic boost for small businesses and the government.

THE Bureau of Internal Revenue (BIR) will set the floor price for vaporized nicotine and non-nicotine products, their devices, and novel tobacco products, according to the draft implementing rules and regulations (IRR) of the Vape Law.

Section 3c of the IRR of Republic Act No. 11900, or known as the Vaporized Nicotine and Non-nicotine Products Regulation Act, states: “The BIR shall have exclusive jurisdiction on the following: c. Floor price setting for Vaporized Nicotine and Non-Nicotine Products, their devices, and Novel Tobacco Products.”

Floor price, as defined by the draft IRR, is the minimum retail price to be set by the BIR at which vaporized nicotine and non-nicotine products, or their devices, or novel tobacco products may be sold, “taking into account the sum of their excise tax, value-added tax, and a reasonable production cost.”

The floor price setting is only among the mandates of the attached agency of the Department of Finance (DOF) under the draft IRR of the Vape law, which was published by the Department of Trade and Industry (DTI) on its website last week.

The draft guidelines of the Vape law strictly prohibits both brick-and-mortar and online stores to sell vape at a price lower than the floor price set by the BIR.

Apart from the floor price mandate, the BIR is in charge of taxpayer registration.

According to the draft IRR of the Vape law, BIR shall also “formulate, draft and publish revenue regulations covering Vaporized Nicotine and Non-Nicotine Products, their devices, and Novel Tobacco Products.”

Moreover, BIR is tasked to “ensure that revenue stamps affixed on Vaporized Nicotine and Non-Nicotine products, their devices, and Novel Tobacco Products are not affixed on non-compliant packages and certify under oath that products are taxed and compliant with the Graphic Health Warning Law or Republic Act 10643 prior to release by the Bureau of Customs (BOC) or a local manufacturer’s warehouse.”

The Vaporized Nicotine Products (VNP) bill lapsed into law on July 24,2022.

Prior to becoming a law, though, government agencies such as the Department of Health (DOH) and the Department of Education (DepEd) opposed the passage of the Vape bill, saying it could expose more people to the products, the health risks of which have not been fully ascertained.

Among the provisions of the Vape bill which they earlier rejected are the transfer of the regulatory jurisdiction of e-cigarette and heated tobacco products from the Food and Drug Administration (FDA) to the Trade department; lowering the minimum age to access such products from 21 to 18 years old; and allowing its sale and promotion online to non-smokers.

On the other hand, Valenzuela City Mayor Wes Gatchalian, one of the principal authors of the bill, said in July that the new vaping law will provide a much-needed economic boost for small businesses and the government.

The DTI was set to hold a virtual public consultation on the draft IRR of RA 11900 on October 27 to 29. 

Image credits: Ilkin Guliyev _ Dreamstime.com



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