Republic of the Philippines 

 
​P​OLYTECHNIC ​U​NIVERSITY OF THE P
​ ​HILIPPINES
​COLLEGE OF ACCOUNTANCY & FINANCE ​Taxation 2: LML / VGL / GSJ  

MODULE 5: EXCISE TAXES

OVERVIEW:

Merchants or companies are subject to business taxes on their sales transactions

or business transactions. The Government imposed business taxes under the provision of the
Tax Code of the Philippines namely: Other Percentage Tax, Value Added Tax, Excise Tax and
Documentary Tax. We have already discussed the OPT and VAT in the previous modules, and
now, we will discuss the Excise tax.

Excise taxes are internal taxes that are levied on the sale of specific goods and services,
such as alcohol, fuel and tobacco. An excise tax is an indirect tax that is not paid by the
customers directly — instead, the excise tax is imposed on the supplier or the producer, who
then includes it in the product price.

Excise taxes are imposed by the federal, state, and local governments. The taxes can
either be applied as a percentage of the total cost of a product or service or as a fixed amount.
For example, the excise tax on a vehicle is a percentage of the total cost while the excise tax on
a tobacco and gasoline is a fixed amount.

MODULE DURATION:
• ​January 11-12, 2021 Synchronous Meeting and Asynchronous Learning. ​• ​For
asynchronous learning inquiries, you may reach me through messenger
group/personal message.

MODULE OBJECTIVES:

After successful Completion of this module, you should be able to:

9. To understand the administrative provisions of Excise Taxes under the Tax Code
10. Know the persons liable to file Excise tax returns
11. Understand the classification and reasons for impositions of excise taxes.
12. Enumerate the group / categories of articles / products subject to excise
tax. 13. Computation of excise tax due.

COURSE MATERIALS:

DEFINITION:

Excise Tax is a tax on the production, sale or consumption of a commodity in a

country.

APPLICABILITY:
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Republic of the Philippines  

​P​OLYTECHNIC ​U​NIVERSITY OF THE P
​ ​HILIPPINES
​COLLEGE OF ACCOUNTANCY & FINANCE ​Taxation 2: LML / VGL / GSJ  

• ​On goods manufactured or produced in the Philippines for domestic sale or

consumption or for any other disposition; and
• ​On goods imported.

TYPES OF EXCISE TAX:

1. Specific Tax – refers to the excise tax imposed which is based on weight or volume
capacity or any other physical unit of measurement
2. Ad Valorem Tax – refers to the excise tax which is based on selling price or other
specified value of the goods/articles

MANNER OF COMPUTATION:

1. Specific Tax = No. of Units/other measurements x Specific Tax Rate

2. Ad Valorem Tax = No. of Units/other measurements x Selling Price of any specific
value per unit x Ad Valorem Tax Rate

MAJOR CLASSIFICATION OF EXCISABLE ARTICLES AND RELATED CODAL

SECTION:​ 1. Alcohol Products (Sections 141-143)

a. Distilled Spirits (Section 141)

b. Wines (Section 142)
c. Fermented Liquors (Section 143)

2. Tobacco Products (Sections 144-146)

a. Tobacco Products (Section 144)

b. Cigars & Cigarettes (Section 145)
c. Inspection Fee (Section 146)

3. Petroleum Products (Section 148)

4. Miscellaneous Articles (Section 149-150)

a. Automobiles (Section 149)

b. Non-essential Goods (Section 150)
c. Non-essential Service (Section 150-A) - RA 10963 [TRAIN Law))
d. Sweetened Beverages (Section 150-B)-(RA 10963 [TRAIN Law])

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Republic of the Philippines  

​P​OLYTECHNIC ​U​NIVERSITY OF THE P
​ ​HILIPPINES
​COLLEGE OF ACCOUNTANCY & FINANCE ​Taxation 2: LML / VGL / GSJ  
5. Mineral Products (Sections 151)

PERSONS LIABLE TO EXCISE TAX:

In General:

a. On Domestic or Local Articles

• ​Manufacturer
• ​Producer
• ​Owner or person having possession of articles removed from the place of
production without the payment of the tax
b. On Imported Articles

• ​Importer
• ​Owner
• ​Person who is found in possession of articles which are exempt from excise taxes
other than those legally entitled to exemption

c. Others:

On Indigenous Petroleum

• ​Local Sale, Barter or Transfer

➢ ​First buyer, purchaser or transferee
• ​Exportation
➢ ​Owner, lessee, concessionaire or operator of the mining claim

TIME OF PAYMENT:

In General

A. On domestic products
➢ ​Before removal from the place of production
B. On imported products
➢ ​Before release from the customs' custody

Watch:
https://www.youtube.com/watch?v=o-BWpkEdNPo
https://www.youtube.com/watch?v=fDKbP15Xo5A

215  

Republic of the Philippines  

​P​OLYTECHNIC ​U​NIVERSITY OF THE P
​ ​HILIPPINES
​COLLEGE OF ACCOUNTANCY & FINANCE ​Taxation 2: LML / VGL / GSJ  

REFERENCES:

Book/E-book:
✓ ​Philippine Laws on Transfer and Business Taxes; 2018 edition by Dean Lilian M,
Litonjua, CPA and Prof Virgilio G. Litonjua, CPA.

Laws:
✓ ​Civil Code of the Philippines
✓ ​RA 10963 / New Tax Code of the Philippines
✓ ​RA 8424 National Internal Revenue Code

Online resources:
✓ ​https://www.slideshare.net/flabert1/05-chapter-6-donors-tax  
✓ ​https://www.youtube.com/watch?v=aHoKhXo0spk&t=168s  
✓ ​https://www.slideshare.net/flabert1/05-chapter-6-donors-tax  
✓ ​https://www.youtube.com/watch?v=e6ZxIL_Mqj4  
✓ ​https://www.youtube.com/watch?v=EvlMZ3er4aQ  
✓ ​https://www.slideshare.net/flabert1  
✓ ​https://www.bir.gov.ph/index.php/tax-information/estate-tax.html 
✓ ​https://www.youtube.com/watch?v=NDBsp8cGl_8  
✓ ​https://www.youtube.com/watch?v=JT5gsGyPZqw  
✓ ​https://www.bir.gov.ph/index.php/tax-information/percentage-tax.html 
✓ ​www.bir.gov.ph  
✓ ​https://www.youtube.com/watch?v=o-BWpkEdNPo  
✓ ​https://www.youtube.com/watch?v=fDKbP15Xo5A 
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