BIR Ruling

October 6, 1971 MEMORANDUM FOR: The Chief, Tobacco Tax Division Thru the Revenue Operations Head (Specific Tax) This refers to the within papers relative to the desire of the House of Edgeworth of Richmond, Virginia U.S.A., to import from the Philippines 120 mm Philippine cigarettes made from dark native tobacco that are wrapped in sweet brown paper such as the Nipa and Palm Tree brands. The question arises as to whether the aforesaid cigarettes may be classified as cigars for internal revenue tax purposes if said cigarettes are wrapped with homogenized tobacco wrapper (which is manufactured from tobacco dust and other waste products of tobacco) . "Cigars" shall be understood to mean all rolls of tobacco, or any substitute therefor, wrapped with tobacco. (Revenue Regulations No. V-39) "Cigarettes" shall be understood to mean all rolls of tobacco, or any substitute therefore, wrapped in paper or any substance other than tobacco. (Revenue Regulations V-39) It is stated in the papers that homogenized tobacco wrapper is manufactured from tobacco dust and other waste products of tobacco and looks like brown cigarette paper and is rolled in bobbins. Under the foregoing definitions, rolls of tobacco, wrapped in paper or any substance other than tobacco are cigarettes. This Office believes that homogenized tobacco wrapper which is manufactured from tobacco dust and other tobacco waste does not remove its classification as paper hence, the rolls of tobacco wrapped therein are still cigarettes for internal revenue tax purposes. MISAEL P. VERA Commissioner of Internal Revenue