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High court upholds higher taxes on ‘new’ cigarette brands  

The Supreme Court has declared as constitutional a section of the tax code that levies higher taxes on cigarette brands that entered the market after 1996.

The Court declared as invalid certain sections of issuances of the Bureau of Internal Revenue (BIR) in that these gave the bureau the power to reclassify or update the classification of new cigarette brands every two years or earlier.

"As modified, this Court declares that: (1) Section 145 of the NIRC [National Internal Revenue Code], as amended by Republic Act 9334, is constitutional; and that (2) Section 4(B)(e)(c), 2nd paragraph of Revenue Regulations No. 1-97, as amended by Section 2 of Revenue Regulations 9-2003, and Sections II(1)(b), II(4)(b), II(7), III (Large Tax Payers Assistance Division II) II(b) of Revenue Memorandum Order No. 6-2003, insofar as pertinent to cigarettes packed by machine, are invalid insofar as they grant the [BIR] the power to reclassify or update the classification of new brands every two years or earlier," said a Court decision authored by Associate Justice Consuelo Ynares-Santiago.

The case began at the Makati City Regional Trial Court Branch 61, which upheld the validity of the questioned section of the tax code and the BIR issuances. The petitioner, British American Tobacco (BAT), brought the case to the Supreme Court.

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