Applicable Ad Valorem Tax Rate on Certain Cigarettes

May 10, 1988 BIR RULING NO. 203-88 142-00 044-88 203-88 Gentlemen : This refers to your letter dated March 23, 1988 requesting a ruling on the applicable ad valorem tax rate on certain cigarettes manufactured by your client, Telengtan Brothers and Sons, Inc., which is doing business under the style of "La Suerte Cigar & Cigarette Factory." cdta It is represented that your client is a corporation engaged in the manufacture and sale of cigarettes in the Philippines; that one of your client's products bears the brand name "Philip Morris Menthol 100's; that in the listing of brands in the World Tobacco Directory, the Brand " Philip Morris " appears, but not " Philip Morris Menthol 100 ' s ". In reply, please be informed that pursuant to the underlined portion of Section 142 (formerly Sec. 126) stating: xxx xxx xxx "(c) Cigarettes packed in twenties. There shall be levied, assessed and collected on cigarettes packed in twenties an ad valorem tax at the rates prescribe below based on the manufacturer's registered wholesale price: "(1) On locally manufactured cigarettes bearing a foreign brand, fifty percent (50%): Provided, That this rate shall apply regardless of whether or not the right to use or title to the foreign brand was sold or transferred by its owner to the local manufacturer. Whenever it has to be determined whether or not a cigarette bears a foreign brand, the listing of brands manufactured in foreign countries appearing in the current World Tobacco Directory shall govern . "(2) On other locally manufactured cigarettes, forty percent (40%)." locally-produced cigarettes bearing a foreign brand which is not listed in the World Tobacco Directory are not considered cigarettes bearing a foreign brand subject to the 50% ad valorem tax. Accordingly, the brand " Philip Morris Menthol 100 ' s " which does not appear in the World Tobacco Directory shall be classified as "other locally manufactured cigarettes" subject to 40% ad valorem tax. cdtech Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner