Module 11 Bustaxa Excisetax

Saint Louis University
SCHOOL OF ACCOUNTANCY, MANAGEMENT, COMPUTING AND INFORMATION STUDIES

Department of Business Laws and Taxation
BUSTAXa_MODULE_11:
EXCISE TAX
Basic Concepts
DEFINITION OF EXCISE TAX

Excise Tax is a tax on the production, sale or consumption of a commodity in a country.
GOODS SUBJECT TO EXCISE TAX/APPLICABILITY:

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:

Specific Tax – refers to the excise tax imposed which is based on weight or volume capacity
or any other physical unit of measurement
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:
Specific Tax = No. of Units/other measurements x Specific Tax Rate
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)
By: Atty. Rosemarie Pitan-Areno,CPA,MBA
Property of and for the exclusive use of SLU. Reproduction, storing in a retrieval system, distributing, uploading or posting online, or transmitting in any form or by any
means, electronic, mechanical, photocopying, recording, or otherwise of any part of this document, without the prior written permission of SLU, is strictly prohibited. 1
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])
5. Mineral Products (Sections 151)
PERSONS LIABLE TO EXCISE TAX:

In General:
1. 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
2. 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
Others:
3. On Indigenous Petroleum
a. Local Sale, Barter or Transfer
First buyer, purchaser or transferee
b. Exportation
Owner, lessee, concessionaire or operator of the mining claim
TIME OF PAYMENT:
In General
1. On domestic products
Before removal from the place of production
2. On imported products
Before release from the customs' custody
PLACE FOR FILING OF THE RETURN AND PAYMENT OF THE TAX

Except as the Commissioner otherwise permits, the return shall be filed with and the tax
paid to any authorized agent bank or Revenue Collection Officer, or duly authorized City
or Municipal Treasurer in the Philippines.
DETERMINATION OF GROSS SELLING PRICE OF GOODS SUBJECT TO AD VALOREM TAX:

In general-
The price, excluding the value-added tax, at which the goods are sold at wholesale in the
place of production or through their sales agents to the public shall constitute the gross
selling price.
If the manufacturer also sells or allows such goods to be sold at wholesale in another
establishment of which he is the owner or in the profits of which he has an interest, the
wholesale price in such establishment shall constitute the gross selling price.
Should such price be less than the cost of manufacture plus expenses incurred until the
goods are finally sold, then a proportionate margin of profit, not less than ten percent
(10%) of such manufacturing cost and expenses, shall be added to constitute the gross
selling price.
EXCISE TAX RATES
FIRST LIST
The following list of excise tax rates is taken from:

https://taxsummaries.pwc.com/philippines/corporate/other-taxes
Excise taxes
Excise taxes apply to services and to goods manufactured or produced in the Philippines for
domestic sales, consumption, or for any other disposition and to things imported.
Manufactured oils and other fuels
Description Units 2018 (PHP) 2019 (PHP) 2020 (PHP)
Lubricating oils and greases Per litre 8.00 9.00 10.00
Processed gas Per litre 8.00 9.00 10.00
Waxes and petrolatum Per kilo 8.00 9.00 10.00
Denatured alcohol Per litre 8.00 9.00 10.00
Naphtha Per litre 7.00 9.00 10.00
Unleaded premium gasoline Per litre 7.00 9.00 10.00
Description Units 2018 (PHP) 2019 (PHP) 2020 (PHP)
Aviation turbo jet fuel Per litre 4.00 4.00 4.00
Kerosene Per litre 3.00 4.00 5.00
Diesel fuel oil Per litre 2.50 4.50 6.00
Liquefied petroleum gas Per kilo 1.00 2.00 3.00
Asphalts Per kilo 8.00 9.00 10.00
Bunker fuel oil Per litre 2.50 4.50 6.00
Petroleum coke Per ton 2.50 4.50 6.00
Automobiles
Automobile (PHP)
Excise tax rate (%)
Over Up to
0 600,000 4
600,000 1,000,000 10
1,000,000 4,000,000 20
Automobile (PHP)
Excise tax rate (%)
Over Up to
4,000,000 50
Hybrid vehicles are subject to 50% of the applicable excise tax rates.
Purely electric vehicles and pick-ups are exempt from excise tax.
Sweetened beverages
Description Excise tax (PHP/litre)
Using purely caloric sweetener, purely non-caloric

6
sweetener, or mixture of both
Using purely high-fructose corn syrup 12
Using purely coconut sap sugar / purely steviol glycosides Exempt
Cigars and cigarettes
Effective date Excise tax (PHP/pack)
1 January 2020 45
1 January 2021 50
1 January 2022 55
1 January 2023 60
Effective 1 January 2024, the specific tax rate shall be increased by 5% every year thereafter.
Vapor products
Effective date Excise tax (PHP/ml)
1 January 2020 37.00
1 January 2021 42.00
1 January 2022 47.00
1 January 2023 52.00
Heated tobacco products
Excise tax (PHP/pack

Effective date
of 20 units)
1 January 2020 25.00
1 January 2021 27.50
1 January 2022 30.00
1 January 2023 32.50
Cosmetic procedures
An excise tax of 5% is imposed on gross receipts from invasive cosmetic procedures and surgeries
directed solely towards altering or enhancing the patient’s appearance for aesthetic purposes.
However, this will not cover procedures necessary to ameliorate a deformity arising from, or directly
related to, a congenital or developmental defect or abnormality, a personal injury resulting from an
accident or trauma, or disfiguring disease, tumour, virus or infection.
The list above reflects provisions of RA 11346, An Act Increasing the Excise Tax on Tobacco Products,
Imposing Excise Tax on Heated Tobacco Products and Vapor Products (Effectivity: January 1, 2020)
The following are terms defined in RA 11346:
"Sec. 147. Definition of Terms.— When used herein and in statements or official forms prescribed
hereunder, the following terms shall have the meaning indicated:
"(a) ‘Cigars’ mean all rolls of tobacco or any substitute thereof, wrapped in leaf tobacco that are
consumed via combustion of the tobacco.
"(b) ‘Cigarettes’ mean all rolls of finely-cut leaf tobacco, or any substitute therefor, wrapped in
paper or in any other material that are consumed via combustion of the tobacco.
"(c) ‘Wholesale price’ shall mean the amount of money or price paid for cigars or cigarettes
purchased for the purpose of resale, regardless of quantity.
"(d) ‘Retail price’ shall mean the amount of money or price which an ultimate consumer or end-
user pays for cigars or cigarettes purchased.
"(e) ‘Heated tobacco products’ refer to tobacco products that may be consumed through heating
tobacco, either electrically or through other means sufficiently to release an aerosol that can be
inhaled, without burning or any combustion of the tobacco. Heated tobacco products include
liquid solutions and gels that are part of the product and are heated to generate an aerosol.
"(f) ‘Vapor products’ shall mean any liquid solution or gel which contains nicotine that transforms
into an aerosol without combustion through the employment of a mechanical heating element,
battery or circuit that can be used to heat such solution or gel, and includes but is not limited to,
a cartridge, a tank, and the device without a cartridge or tank. It is commonly known as ‘e-liquids’
for ‘e-cigarettes’. It also includes electronic nicotine and non-nicotine delivery systems
(ENDS/ENNDS) which are combinations of non-tobacco containing e-liquids or refills which
contain up to sixty-five milligrams per milliliter (65mg/ml) of nicotine in the e-liquid or refill and an
electronic delivery device to produce an aerosol, mist or vapor that users inhale by mimicking the
act of smoking."
SECOND LIST
The following list is taken from: https://www.bir.gov.ph/index.php/tax-information/excise-tax.html
The list below is updated only up to the TRAIN law (RA 10963) which became effective January 1,
2018. For the rates on cigarettes and tobacco and heated tobacco products, please follow the
rates on the FIRST LIST
A. ALCOHOL PRODUCTS
NEW TAX RATES based on Republic Act No. 10351 Remarks
PARTICULARS 2018
2013 2014 2015 2016 2017
onwards
A. DISTILLED SPIRITS, AD VALOREM & SPECIFIC TAX
1) AD VALOREM TAX RATE - Based on the

Net Retail Price (NRP) per proof
(excluding the excise and value-added 15% 15% 20% 20% 20% 20%
taxes);
and
Effective 1/1/2016, the

specific tax rate shall be
2) SPECIFIC TAX - Per proof liter Php20 Php20 Php20 Php20.80 Php21.63
increased by 4% every
year thereafter
B. WINES, per liter of volume capacity
1) Sparkling wines/ champagnes, where

the NRP (excluding the excise and VAT)
per bottle of 750ml volume capacity,
regardless of proof is:
Php500.00 or less Php250 Php260 Php270.40 Php281.22 Php292.47 specific tax rate shall be
More than Php500.00 Php700 Php728 Php757.12 Php787.40 Php818.90 year thereafter
2) Still wines and carbonated wines

containing 14% of alcohol by volume or Php30.00 Php31.20 Php32.45 Php33.75 Php35.10
less
3) Still wines and carbonated wines
containing more than 14% (of alcohol by
Php60.00 Php62.40 Php64.90 Php67.50 Php70.20
volume) but not more 25% of alcohol by
volume
4) Fortified wines containing more than

Taxed as distilled spirits
25% of alcohol by volume
C. FERMENTED LIQUORS , per liter of volume capacity
1) If the NRP (excluding excise and VAT)

per liter of volume capacity is: Effective 1/1/2018, the
Php 50.60 and below Php15.00 Php17.00 Php19.00 Php21.00 Php23.50 increased by 4% every
year thereafter
More than Php 50.60 Php20.00 Php21.00 Php22.00 Php23.00 Php23.50

2) If brewed and sold at microbreweries
or small establishments such as pubs and Php28.00 Php29.12 Php30.28 Php31.50 Php32.76
restaurants, regardless of the NRP
year thereafter
NOTE:
IN CASE OF FERMENTED LIQUORS AFFECTED BY THE "NO DOWNWARD RECLASSIFICATION " PROVISION, THE 4% INCREASE
SHALL APPLY TO THEIR RESPECTIVE APPLICABLE TAX RATES
B. TOBACCO PRODUCTS
NEW TAX RATES based on Republic Act No. 10351 Remarks 2018
PARTICULARS
2013 2014 2015 2016 2017 onwards
A. TOBACCO PRODUCTS, per kilogram
1. Tobacco Products
(a) Tobacco twisted by hand or reduced

into a condition to be consumed in any
Php1.75 Php1.82 Php1.89 Php1.97 Php2.05 Effective 1/1/2014,
manner other than the ordinary mode of the specific tax rate
drying and curing; shall be increased by
4% every year
(b) Tobacco prepared or partially prepared Php1.75 Php1.82 Php1.89 Php1.97 Php2.05 thereafter
with or without the use of any machine or
instrument or without being pressed or
sweetened; and
(c) Fine-cut shorts and refuse, scraps,

clippings, cuttings, stems, midribs and Php1.75 Php1.82 Php1.89 Php1.97 Php2.05
sweepings of tobacco;
2. Chewing tobacco unsuitable for use in

Php1.50 Php1.56 Php1.62 Php1.68 Php1.75
any other manner
B. CIGARS, per cigar
3. Cigars Effective 1/1/2014,

the specific tax rate
(a) Based on the NRP per cigar (excluding
20% 20% 20% 20% 20% shall be increased by
the excise and value-added taxes), and
4% every year
(b) Per cigar Php5.00 Php5.20 Php5.41 Php5.62 Php5.85 thereafter
C. CIGARETTES , per pack
NEW TAX RATES based on RA No. 10963 (TRAIN Law)
January 1, July 1, 2018 January 1, January 1,

PARTICULARS 2018 until until 2020 until 2022 until
January 1, 2024 onwards
June 30, December December December
2018 31, 2019 31, 2021 31,2023
1. Cigarettes packed by hand Php32.50 Php35.00 Php37.50 Php40.00
Effective 1/1/2024, the specific

tax rate shall be increased by
4% every year thereafter
2. Cigarettes packed by machine Php32.50 Php35.00 Php37.50 Php40.00
INSPECTION FEE - There shall be collected inspection fees on leaf tobacco, scrap, cigars, Cigarettes and other
manufactured tobacco and tobacco products as follows:
PRODUCT TYPE INSPECTION FEE
(1) Cigars P 0.50 per thousand pieces or fraction thereof
(2) Cigarettes P 0.10 per thousand sticks or fraction thereof
(3) Leaf Tobacco P 0.02 per kilogram or fraction thereof
(4) Scrap and other manufactured tobacco P 0.03 per kilogram or fraction thereof
C. PETROLEUM PRODUCTS
EFFECTIVITY (RA 10963-TRAIN Law)
PRODUCT TYPE
January 1, 2018 January 1, 2019 January 1, 2020
(a) Lubricating oils and greases, including but not limited to base Php9.00 Php10.00
stock for lube oils and greases, high vacuum distillates, aromatic
extracts and other similar preparations, and additives for
lubricating oils and greases, whether such additives are petroleum
based or not,per liter and kilogram respectively, of volume capacity
or weight
(a.1) Locally produced or imported oils previously taxed but are

subsequently reprocessed, re-refined or recycled, per liter and
kilogram of volume capacity or weight.
(b)Processed gas, per liter of volume capacity Php8.00
(c)Waxes and petrolatum, per kilogram
(d)Denatured alcohol to be used for motive power , per liter of

volume capacity
(e)Asphalt, per kilogram
(f)Naphtha, regular gasoline, pyrolysis gasoline and other similar Php9.00 Php10.00
products of distillation, per liter of volume capacity
(g)Unleaded premium gasoline, per liter of volume capacity Php7.00
(h)Kerosene, per liter of volume capacity Php3.00 Php4.00 Php5.00
(i)Aviation turbo jet fuel,aviation gas, per liter of volume capacity Php4.00 Php4.00 Php4.00
(j)Kerosene when used as aviation fuel, per liter of volume capacity
(k)Diesel fuel oil, and on similar fuel oils having more or less the Php4.50 Php6.00
same generating power, per liter of volume capacity
(l)Liquified petroleum gas used for motive power, per kilogram
(m)Bunker fuel oil, and on similar oils having more or less the same
generating power, per liter of volume capacity Php2.50
(n)Petroleum coke, per metric ton
(o)Liquified petroleum gas, per kilogram Php1.00 Php2.00 Php3.00
(p)Naphtha and pyrolysis gasoline, when used as raw material in Php0.00 Php0.00
the production of petrochemical products or in the refining of
petroleum products, or as replacement fuel for natural-gas-fired-
combined cycle power plant, in lieu of lacally-extracted natural gas
during the non-availability thereof, per liter of volume capacity
(q)Liquified petroleum gas, when used as raw material in the Php0.00

production of petrochemical products, per kilogram
(r)Petroleum coke when used as feedstock to any power

generating facility, per metric ton
D. MINERALS AND MINERAL PRODUCTS
PRODUCT TYPE TAX RATES (RA 10963-TRAIN Law)
Coal and coke (Domestic and Imported) January 1, 2018 - Php50.00
January 1, 2019 - Php100.00
January 1, 2020 - Php150.00
and onwards
Nonmetallic Minerals and Quarry Reources (Locally Four percent (4%) based on the actual market value of
extracted or produced) the gross output thereof at the time of removal
Nonmetallic Minerals and Quarry Resources (Imported) Four percent (4%) based on the value used by the
Bureau of Customs (BOC) in determining tariff and
customs duties, net of excise tax and value-added tax
Locally-extracted natural gas and liquefied natural gas Exempt
All Metallic Minerals (locally extracted or produced Four percent (4%) based on the actual market value of
copper, gold, chromite and other metallic minerals) the gross output thereof at the time of removal
Imported copper, gold, chromite and other metallic Four percent (4%) based on the value used by BOC in
minerals determining tariff and customs duties, net of excise tax
and value added tax
On indigenous petroleum Six percent (6%) of the fair international market price
thereof, on the first taxable sale, barter, exchange or
such similar transaction, such tax to be paid by the
buyer or purchaser before removal from the place of
production. The phrase “first taxable sales, barter,
exchange or similar transaction’' means the transfer of
indigenous petroleum in its original, state to a first
taxable transferee. The fair international market price
shall be determined in consultation with appropriate
government agency.
For the purpose of this Subsection, “indigenous

petroleum” shall include locally-extracted mineral oil,
hydrocarbon gas, bitumen, crude asphalt. mineral gas
and all other similar or naturally associated substances
with the exception of coal, peat, bituminous shale
and/or stratified mineral deposits."
NOTE:
In the case of mineral concentrates not traded in commodity exchanges in the Philippines or abroad, such as
copper concentrate, the actual market value shall be the world price quotations of the refined mineral products
content thereof prevailing in the said commodity exchanges, after deducting the smelting, refining and other
charges incurred in the process of converting the mineral concentrates into refined metal traded in those
commodity exchanges.
On minerals and mineral products sold or consigned abroad, the actual cost of ocean freight and insurance shall
be deducted from the tax base.
E. AUTOMOBILES AND OTHER MOTOR VEHICLES
NET MANUFACTURER'S PRICE/IMPORTER'S SELLING PRICE TAX RATES (RA 10963 (TRAIN Law)
OVER UP TO RATE
0 Php600,000 4%
Php600,000 Php1,000,000 10%
Php1,100,000 Php4,000,000 20%
Php4,000,000 over 50%
F. NON-ESSENTIAL GOODS
Twenty percent (20%) based on the wholesale price or the value of importation used by the Bureau
of Customs in determining Tariff and Customs Duties, net of Excise and Value-Added taxes
G. SWEETENED BEVERAGES (RA 10963-TRAIN Law)
PRODUCT TAX RATE
Per Liter of Volume

Capacity
Using purely caloric sweeteners, and purely non-caloric sweeteners, or a mix of Php6.00
caloric and non-caloric sweeteners
Using purely high fructose corn syrup or in combination with any caloric or non- Php12.00
caloric sweetener
Using purely coconut sap sugar and purely steviol glycosides Exempt
H. INVASIVE COSMETIC PROCEDURES - (RA 10963-TRAIN Law)
SERVICE Tax Rate
Performance of Services on Invasive Cosmetic Procedures 5%
-END OF MODULE_11-
References:
 Laws and Issuances:
The National Internal Revenue Code of the Philippines (R.A. No. 8424 as amended up to
R.A. No. 10963)
RA 11346: An Act Increasing the Excise Tax on Tobacco Products, Imposing Excise Tax on
Heated Tobacco Products and Vapor Products
 Books:
Transfer and Business Taxation (7th ed) by: Valencia and Roxas
Business and Transfer Taxation (2019 ed) by: Rex B. Banggawan
 Internet websites:
https://www.bir.gov.ph
https://www.investopedia.com
https://www.pwc.com
https://www.bworldonline.com/
https://www.lawphil.net/
http://www.ntrc.gov.ph/
https://taxsummaries.pwc.com/

Module 11 Bustaxa Excisetax

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Module 11 Bustaxa Excisetax

Uploaded by

Copyright:

Available Formats

Saint Louis University

SCHOOL OF ACCOUNTANCY, MANAGEMENT, COMPUTING AND INFORMATION STUDIES

DEFINITION OF EXCISE TAX

GOODS SUBJECT TO EXCISE TAX/APPLICABILITY:

TYPES OF EXCISE TAX:

MAJOR CLASSIFICATION OF EXCISABLE ARTICLES AND RELATED CODAL SECTION:

By: Atty. Rosemarie Pitan-Areno,CPA,MBA

2. Tobacco Products (Sections 144-146)

3. Petroleum Products (Section 148)

4. Miscellaneous Articles (Section 149-150)

5. Mineral Products (Sections 151)

PERSONS LIABLE TO EXCISE TAX:

By: Atty. Rosemarie Pitan-Areno,CPA,MBA

PLACE FOR FILING OF THE RETURN AND PAYMENT OF THE TAX

DETERMINATION OF GROSS SELLING PRICE OF GOODS SUBJECT TO AD VALOREM TAX:

By: Atty. Rosemarie Pitan-Areno,CPA,MBA

The following list of excise tax rates is taken from:

Manufactured oils and other fuels

Description Units 2018 (PHP) 2019 (PHP) 2020 (PHP)

Lubricating oils and greases Per litre 8.00 9.00 10.00

Processed gas Per litre 8.00 9.00 10.00

Waxes and petrolatum Per kilo 8.00 9.00 10.00

Denatured alcohol Per litre 8.00 9.00 10.00

Naphtha Per litre 7.00 9.00 10.00

Unleaded premium gasoline Per litre 7.00 9.00 10.00

By: Atty. Rosemarie Pitan-Areno,CPA,MBA

Description Units 2018 (PHP) 2019 (PHP) 2020 (PHP)

Aviation turbo jet fuel Per litre 4.00 4.00 4.00

Kerosene Per litre 3.00 4.00 5.00

Diesel fuel oil Per litre 2.50 4.50 6.00

Liquefied petroleum gas Per kilo 1.00 2.00 3.00

Asphalts Per kilo 8.00 9.00 10.00

Bunker fuel oil Per litre 2.50 4.50 6.00

Petroleum coke Per ton 2.50 4.50 6.00

By: Atty. Rosemarie Pitan-Areno,CPA,MBA

Description Excise tax (PHP/litre)

Using purely caloric sweetener, purely non-caloric

Using purely high-fructose corn syrup 12

Using purely coconut sap sugar / purely steviol glycosides Exempt

Cigars and cigarettes

Effective date Excise tax (PHP/pack)

By: Atty. Rosemarie Pitan-Areno,CPA,MBA

Effective date Excise tax (PHP/ml)

1 January 2020 37.00

1 January 2021 42.00

1 January 2022 47.00

1 January 2023 52.00

Heated tobacco products

Excise tax (PHP/pack

1 January 2020 25.00

1 January 2021 27.50

1 January 2022 30.00

1 January 2023 32.50

By: Atty. Rosemarie Pitan-Areno,CPA,MBA

The following are terms defined in RA 11346:

By: Atty. Rosemarie Pitan-Areno,CPA,MBA

The following list is taken from: https://www.bir.gov.ph/index.php/tax-information/excise-tax.html

NEW TAX RATES based on Republic Act No. 10351 Remarks

A. DISTILLED SPIRITS, AD VALOREM & SPECIFIC TAX

1) AD VALOREM TAX RATE - Based on the

Effective 1/1/2016, the

B. WINES, per liter of volume capacity

1) Sparkling wines/ champagnes, where