The Bureau of Internal Revenue (BIR) clarifies that the Food and Drug Administration (FDA) does not have the authority to determine the taxation status of food products.
BIR said the FDA's role, as per its charter, is to ensure the safety, efficacy, and quality of health products.
The BIR retains the right to classify products for taxation if the FDA does not adhere to the relevant codex descriptors.
The BIR's announcement is a response to the need to impose excise tax on certain sweetened beverages marketed as milk products.
BIR: FDA can't decide food product tax status
Oct 20, 2023 04:50 AM
At a glance
The Bureau of Internal Revenue (BIR) has stated that the Food and Drug Administration (FDA) lacks the authority to determine the taxation status of food products.
BIR Commissioner Romeo D. Lumagui, Jr. clarified in Revenue Memorandum Circular 112-2023 that the FDA's role, according to its charter, is to ensure the safety, efficacy, and quality of health products.
Lumagui emphasized that "the BIR retains the right to classify products for taxation if the FDA does not adhere to the relevant codex descriptors."
This announcement by the BIR is in response to the need to impose excise tax on specific sweetened beverages packaged and marketed as milk products.
According to Section 150-B of the Tax Reform for Acceleration and Inclusion Law, sweetened beverages are subject to excise tax.
The circular also specifies five categories of products, including various types of milk, which are exempt from the sweetened beverage excise tax.
These milk products encompass plain, infant, growing-up, soy, ready-to-drink, flavored, and fermented varieties.