PMFTC says no price increase yet

MANILA, Philippines - PMFTC, the merged entity of Philip Morris and Fortune Tobacco Corp., said that it has not raised the prices of its cigarette products.

The company made the clarification following reports that some wholesalers and retailers have started selling PMFTC products at higher prices. These include Marlboro, Philip Morris, Hope, Fortune and Champion cigarettes.

“It has come to our attention, however, that some wholesalers and retailers have started selling our cigarette products at higher prices even during the holidays. We can assume that this was in reaction to the BIR’s publication of the revised tax rates and the subsequent media coverage and pronouncements of various government authorities on this issue,” PMFTC said in a statement yesterday.

Some stores have already started selling cigarette and tobacco products at higher prices.

One grocery in Quezon City, for instance, is now selling Marlboro 10s for P30 per pack from P17 per pack previously.

The Bureau of Internal Revenue (BIR) has already issued the implementing rules and regulations (IRR) for the newly signed sin tax reform measure.

The new rules put in effect Republic Act 10351 or An Act Restructuring the Excise Tax on Alcohol and Tobacco, which, prescribes higher tax rates on tobacco and alcohol products.

For cigarettes packed by machine and with a net retail price per pack of P11.50 and below, the excise tax rate is P12 per pack effective Jan. 1, 2013. The rate will increase to P17 per pack in 2014, P21 per pack in 2015, P25 per pack in 2016 and P30 per pack in 2017.

For cigarettes with a net retail price of more than P11.50 per pack, the excise tax rate from 2013 to 2017 will be P25 per pack, P27 per pack, P28 per pack, P29 per pack and P30 per pack, respectively.

President Aquino signed the sin tax reform law after months of debates in both the House of Representatives and the Senate.

The sin tax reform measure corrects inequities in tax structure that have plagued the system for decades.

It also removes the price classification freeze that has pegged tobacco products to 1996 prices as the basis for their tax classification.

Furthermore, the approved version paves the way for a shift from the current multi-tiered system to a unitary tax regime by 2017 for tobacco and fermented liquor.

In terms of revenues, the new sin tax bill would allow a collection of P33.96 billion in incremental revenues from tobacco and alcohol for the next year and P184.31 billion over the next four years.