BIR Ruling

August 29, 1974 Mr. Ralph Nubla President, Philippine Cigar & Cigarette Manufacturer's Assn., Inc. 4376 Librada Avelino St. cor. Quirino Avenue Paraaque, Rizal S i r : This refers to your letter dated July 15, 1974 requesting this Office to recommend to His Excellency President Marcos, to delete the proviso in Section 137(b) of the Tax Code, as amended, requiring the printing of the maximum retail price on the labels of cigarette brands. cdt In support of your request, you stated that the printing of maximum retail price on the label of cigarettes does not serve any purpose; that it gives retailers an opportunity to take advantage of the printed maximum retail prices, to sell brands at that price when factory price permit them to sell at prices lower than the maximum retail price with reasonable profit. In reply, I have the honor to inform you that the purpose of requiring the printing of the maximum retail price on the labels of cigarette brands is to facilitate the classification of local cigarettes and the determination of the rate of specific tax applicable to such cigarette brands. White it may be true that retailers take advantage of the printed maximum retail price and sell at that price when they can sell at a lower price with a reasonable profit yet such printing of the maximum retail price on the cigarette labels or packs serves also as a deterrent in selling such cigarettes above the maximum price allowed by law. Be that as it may, this Office is studying an alternative proposal requiring the printing on packs or labels some kind of identification marks to distinguish one brand from the other for tax purposes in lieu of the printing of the maximum retail price on the cigarette labels or packs under the present law. acd Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue TAN-1601-593-5