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The Bureau of Customs has started implementing the annual increase in excise tax rates on alcohol and tobacco products
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The updated rates were integrated into BOC’s Electronic-to-Mobile System and took effect on January 15, 2026
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The implementation of the updated excise tax rates on alcohol, tobacco, and vapor products are pursuant to under Republic Act No. 11346 or the Tobacco Tax Law of 2018, and RA 11467, which automatically increases the excise taxes on alcohol products, e-cigarettes, and heated tobacco products
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The higher excise taxes on so-called “sin products” are intended to raise more revenues to finance the universal health care program being implemented by the state-run Philippine Health Insurance Corp.
The Bureau of Customs (BOC) has started implementing the annual increase in excise tax rates on alcohol and tobacco products.
The updated rates were integrated into BOC’s Electronic-to-Mobile System and took effect on January 15, 2026, according to Management Information System and Technology Group (MISTG) Memo No. 01-2026 dated January 14.
The updated excise taxes implemented under MISTG Memo No. 01-2026 are as follows:
- Distilled spirits – ad valorem tax of 22% of net retail price (NRP), specific tax of P74.16 per liter
- Wine specific tax – P70.92 per liter
- Unmanufactured tobacco – P2.92 per kilogram
- Heated tobacco – P37.63 per pack of 20 units
- Nicotine salt or salt nicotine – P69.46 per 10 milliliter
- Conventional freebase or classic nicotine – P60.20 per milliliter
Due to inherent system limitations, MISTG Memo No. 01-2026 said the computation of the ad valorem tax applicable to distilled spirits and cigars will be performed manually and as such, tax is determined based on the NRP of the product.
Moreover, the specific tax rate for vapor products depends on the specific nicotine category.
The higher excise taxes on so-called “sin products” are intended to raise more revenues to finance the universal health care program being implemented by the state-run Philippine Health Insurance Corp.
MISTG Memo No. 01-2026 implements the excise tax rates on alcohol, tobacco, and vapor products under Republic Act (RA) No. 11346 and RA 11467.
RA 11346 or the Tobacco Tax Law of 2018, signed in July 2019, increased the excise taxes on tobacco products and imposed taxation and regulation on heated tobacco products (HTP), and vapor products or popularly known as e-cigarettes or vapes.
Implementation began in 2020 with the yearly indexation of the specific tax rates of cigars rising from 4% to 5% effective January 1, 2024 while retaining the 20% ad valorem rate. Rates for cigarettes are also set to increase by 5% every year starting 2024.
RA 11467, signed in January 2020, increased and simplified the tax base of the excise tax on alcohol products and amended the imposed taxation on HTP and vapor products under RA 11346.
The law raises excise taxes on distilled spirits every year until 2024, and will increase by 6% every year starting 2025. These are also different from the ad valorem tax imposed on the products which is equivalent to 22% of the price of the distilled spirits.
Distilled spirits include whisky, brandy, rum, gin and vodka, and other similar products or mixtures.
The rate of excise tax for wines increases by 6% every year beginning 2021.
Excise tax for HTP started in 2020 with specific rate increases yearly until 2023, then will have a 5% increase annually starting 2024.
Excise taxes for vapor products also had specific rate increases until 2023, and then will go up by 5% every year in the succeeding years.—Roumina Pablo
READ: BOC implements higher excise tax hike on alcohol, tobacco
