The Supreme Court announced as constitutional a provision of the National Internal Revenue Code (NIRC) which imposes higher taxes on cigarette brands that entered the market after 1996.

The high court en banc solid affirmed the constitutionality of Section 145 of the NIRC that imposes best tobacco brands at their current net retail price and present brands at their net retail price as of Oct. 1, 1996.

It also canceled two orders imposed by the Bureau of Internal Revenue to fulfill the NIRC provision which empowered the bureau to reclassify or update cigarette brands every two years or so.

The case appeared from a suit brought in 2003 by the British American Tobacco (BAT), the producer of Lucky Strike Lights, Lucky Strike Filter and Lucky Strike Menthol Lights trademarks, against the tax code provision and the BIR regulations which it said broke the equal protection and uniformity clauses of the Constitution.

After the Makati court supported the constitutionality and validity of the NIRC section and the two BIR regulations, the BAT elevated the case to the high court.

In its decision, the high court said the questioned provision did not break the equal protection clause as it addressed Congress’ concern not to give too much authority to the tax implementers to avoid potential corruption and abuse.