TARLAC STATE UNIVERSITY - COLLEGE OF BUSINESS AND ACCOUNTANCY

2ND SEMESTER ACADEMIC YEAR 2021-2022

TAX 3 – SPECIAL TAXATION

EXCISE TAX
Excise tax are imposed on certain articles and now also on services (under TRAIN
law) either to promote health or to discourage purchase of certain articles or to
protect the environment.
It is a hybrid consumption tax in addition to VAT or the Percentage Tax.
GOODS SUBJECT TO EXCISE TAXES
Excise taxes apply to:
a. Goods manufactured or produced in the Philippines for domestic sale or
consumption or for any other disposition; and
b. To things imported.
c. Non-essential services (added by TRAIN law)
KINDS AS TO AMOUNT:
a. Specific tax - based on weight or volume capacity or any other physical unit of
measurement;
b. Ad Valorem tax - based on selling price or other specified value.
Gross selling price of goods
- price at which the goods are sold at wholesale in the place of production
or through their sales agents to the public
- excluding the value-added tax
- 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 10% percent of such manufacturing cost and
expenses shall be added to constitute the gross selling price.
The return shall be filed, and the excise tax be paid by the manufacturer or
producer before removal from the place of production. A separate return must be
filed for each place of production and must include the following:
a. Description of products to be removed
b. Quantity or volume of products to be removed
c. Applicable tax base
d. Amount of tax due thereon.
Should domestic products be removed from the place of production without the
payment of the tax, the owner or person having possession thereof shall be liable
for the tax due thereon.
Manufacturer's or Producer's Sworn Statement
Every manufacturer or producer of goods or products subject to excise taxes shall
file with the CIR on the date or dates designated by the latter, and as often as may
be required, a sworn statement showing, among other information, the different
goods or products manufactured or produced and their:
a. Gross selling price or market value
b. The cost of manufacture or production
c. Expenses incurred or to be incurred until the goods or products are finally
sold.
Tax Credit or Tax Refund
As a consumption tax, it normally applies when the goods are intended for domestic
consumption. Hence, it taxes goods domestically produced imported for domestic
use and exempts goods produced for export. If the goods are exported out of the
country, the manufacturer or producer the goods subjected to excise tax may claim
tax credit or tax refund for the excise tax paid.

Excise taxes are generally levied at the point of production or importation.

The tax is collected before the goods are removed at the point of production or
before the removal of the goods from Customs. Exceptionally, cosmetic surgery and
mineral products are subject to excise tax at the point of sale.
 TARLAC STATE UNIVERSITY - COLLEGE OF BUSINESS AND ACCOUNTANCY
2ND SEMESTER ACADEMIC YEAR 2021-2022
TAX 3 – SPECIAL TAXATION

Excise Tax on Importation EXCISE TAX ON ALCOHOL PRODUCTS

Similar rules on tax base apply as that of manufactured/produced articles in A. Distilled Spirits
computing for the excise tax on importation. Excise Tax Due: shall be the ad valorem tax plus the specific tax.
Excise taxes on imported articles shall be paid by the owner or importer or the Effectivity Ad Valorem Specific (per proof liter)
person who is found in possession of articles, which are exempt from excise taxes January 1, 2020 20% P 24.34
other than those legally entitled to exemption, to the customs officers, conformably January 23, 2020 22% P 42.00
with the regulations of the Department of Finance, before the release of such January 1, 2021 22% P 47.00
articles from the customshouse. January 1, 2022 22% P 52.00
January 1, 2023 22% P 59.00
ARTICLES SUBJECT TO EXCISE TAX January 1, 2024 22% P 66.00
a. Alcohol Products 2025 onwards 22% Specific tax rate shall be
- distilled spirits increased by 6% and
- including wines every year thereafter
- fermented liquor Spirits or distilled spirits is the substance known as ethyl alcohol, ethanol or
b. Tobacco Products spirits of wine, including all dilutions, purifications and mixtures thereof, from
- tobacco products (now including heated tobacco and vapor products) whatever source, by whatever process produced, and shall include whisky,
- cigars and cigarettes brandy, rum, gin and vodka, and other similar products of mixtures.
- inspection fee Proof Spirits is liquor containing 1/2 of its volume of alcohol of a specific gravity
c. Petroleum Products, such as gas, gasoline, diesel, wax, lubricant oils and of seven thousand nine hundred and thirty-nine ten thousandths (0.7939) at
greases, kerosene, asphalt, and bunker fuel oil fifteen degrees centigrade (150C).
d. Automobiles Proof Liter means a liter of proof spirits.
e. Non-Essential Goods, such as jewelry, perfume, and yacht
B. Wines
f. Sugar Sweetened Beverages, like soft drinks and sweetened drinks (under Excise tax beginning January 1, 2020:
TRAIN Law) Specific (per liter)
g. Non-Essential Services, such as cosmetic surgery (under TRAIN Law) Sparkling wines/champagnes regardless of proof, if the
h. Mineral Products, whether as metallic or non-metallic minerals and quarry net retail price per bottle of P750mI volume capacity,
resources regardless of proof is:
P 500 or less P 328.98
More than P 500 P 921.15
Still wines containing 14% of alcohol by volume or less P 39.48
 TARLAC STATE UNIVERSITY - COLLEGE OF BUSINESS AND ACCOUNTANCY
2ND SEMESTER ACADEMIC YEAR 2021-2022
TAX 3 – SPECIAL TAXATION

Still wines containing more than 14% but not more P 78.96 EXCISE TAX ON TOBACCO PRODUCTS
than 25% of alcohol by volume A. Heated Tobacco Products
per pack of 20 units or any packaging combinations of not more than 20 units.
Fortified wines containing more than 25% of alcohol by Tax as distilled
Effectivity Excise Tax Rate
volume spirits
January 1, 2020 P 10.00
January 23, 2020 P 25.00
Excise tax beginning January 23, 2020:
January 1, 2021 P 27.50
classification of wines was removed pursuant to RA No. 11467.
January 1, 2022 P 30.00
All types of wines are subject to specific excise tax rates per liter.
January 1, 2023 P 32.50
January 23, 2020 P 50.00
2024 onwards Specific tax rate shall be
January 1, 2021 P 53.00
increased by 5% every year
January 1, 2022 P 56.18
January 1, 2023 P 59.55
B. Vapor Products
January 1, 2024 P 63.12
2025 onwards Specific tax rate shall be Effectivity Quantity Excise Tax
increased by 6% and every January 1, 2020 to 0.00ml to 10.00ml P 10.00
year thereafter January 22, 2020 10.01ml to 20.00ml P 20.00
20.01ml to 30.00ml P 30.00
C. Fermented Liquors 30.01ml to 40.00ml P 40.00
excise tax on beer, lager beer, ale, porter and other fermented liquors 40.01ml to 50.00ml P 50.00
except tuba, basi, tapuy and similar fermented liquors. More than 50.00ml P 50.00 plus P 10.00 for
Effectivity Specific (per liter) every additional 10.00ml
January 1, 2020 P 26.34
January 23, 2020 P 35.00 C. Cigars
January 1, 2021 P 37.00 Excise Tax Due: shall be the ad valorem tax plus the specific tax.
January 1, 2022 P 39.00 Effectivity Ad Valorem Excise Tax Rate
January 1, 2023 P 41.00 January 1, 2020 20% P 6.57
January 1, 2024 P 43.00 January 1, 2021 20% P 6.83
2025 onwards Specific tax rate shall be January 1, 2022 20% P 7.10
increased by 6% and every January 1, 2023 20% P 7.38
year thereafter 2024 onwards 20% Specific tax rate shall be
increased by 5% every year
 TARLAC STATE UNIVERSITY - COLLEGE OF BUSINESS AND ACCOUNTANCY
2ND SEMESTER ACADEMIC YEAR 2021-2022
TAX 3 – SPECIAL TAXATION

D. Cigarettes Packed by Hand or Machine EXCISE TAX ON PETROLEUM PRODUCTS

per pack of 20 units or any packaging combinations of not more than 20 units Manufactured Oils and Other Fuels:
Effectivity Excise Tax Rate LPG when used as raw material in the production of petrochemical products and
January 1, 2020 P 45.00 Petroleum Coke when used as feedstock to any power generating facility are
January 1, 2021 P 50.00 exempt.
January 1, 2022 P 55.00 2018 2018 2020
January 1, 2023 P 60.00 Lubricating oils and greases, including but not P 8.00 P 9.00 P 10.00
2024 onwards Specific tax rate shall be limited to, base-stock for lube oils and greases,
increased by 5% every year high vacuum distillates, aromatic extracts and
other similar preparations, anti-additives for
Inspection Fee: per inspection made lubricating oils and greases, whether such
Each thousand Cigars or fraction thereof P 0.50 additives are petroleum based or not
Each thousand Cigarettes or a fraction thereof P 0.10 2018 2018 2020
Each thousand Heated Tobacco P 0.10 Processed gas P 8.00 P 9.00 P 10.00
Each 1ml of Vapor Products P 0.01 Waxes and petrolatum
Each kilogram of leaf tobacco or fraction thereof P 0.02 On denatured alcohol to be used for motive
Each kilogram or fraction thereof of scrap and other P 0.03 power
manufactured tobacco Asphalts
Naphtha, regular gasoline and other similar P 7.00 P 9.00 P 10.00
Floor Price or Minimum Price: products of distillation
Total production cost/expenses of the cheapest brand per tobacco product Unleaded premium gasoline
including the sum of excise tax and VAT. Kerosene P 3.00 P 4.00 P 5.00
Aviation turbo jet fuel P 4.00 P 4.00 P 4.00
Kerosene when used as aviation fuel, per liter
of volume capacity
Diesel fuel oil, and on similar fuel oils having P 2.50 P 4.50 P 6.00
more or less the same generating power
Liquefied petroleum gas used for motive
power, per kilogram
Bunker fuel oil, and on similar fuel oils having
more or less the same generating power
Petroleum Coke, per metric ton
Liquefied Petroleum Gas, per kilogram P 1.00 P 2.00 P 3.00
 TARLAC STATE UNIVERSITY - COLLEGE OF BUSINESS AND ACCOUNTANCY
2ND SEMESTER ACADEMIC YEAR 2021-2022
TAX 3 – SPECIAL TAXATION

EXCISE TAX ON AUTOMOBLES EXCISE TAX ON MINERAL PRODUCTS

Excise tax based on the manufacturer's or importer's selling price, net of excise Product Tax Rate
and value-added taxes. Coal and Coke (Domestic and Imported) Jan. 1, 2018 - P50.00
Beginning January 1, 2018: Jan. 1, 2019 - P100.00
Jan. 1, 2020 onwards - P150.00
Net Manufacturer’s Price / lmporter's Selling Price Rate Nonmetallic Minerals and Quarry 4% based on actual market value
Over Up to Resources (Locally extracted or produced) of the gross output at the time of
P0 P 600,000 4% removal
P 600,000 P 1,000,000 10% Nonmetallic Minerals and Quarry Resources 4% based on the value used by the
P 1,100,000 P 4,000,000 20% (Imported) BOC in determining the tariff and
P 4,000,000 over 50% customs duties, net of excise tax
and VAT.
Locally-extracted natural gas and liquefied Exempt
EXCISE TAX ON NON-ESSENTIAL GOODS natural gas
20% based on the wholesale price or the value of importation used by the Bureau of All Metallic Minerals (locally extracted or 4% based on the actual market
Customs in determining tariff and customs duties, net of excise tax and value-added produced copper, gold, chromite and other value of the gross output at the
tax. metallic minerals) time of removal
a. All goods commonly or commercially known as jewelry, whether real or Indigenous Petroleum 6% of the fair international market
imitation, pearls, precious and semi-precious stones and imitations thereof; (locally extracted mineral oil, hydrocarbon price thereof, on the first taxable
goods made of, or ornamented, mounted or fitted with, precious metals or gas, bitumen, crude asphalt, mineral gas sale, barter, exchange or such
imitations thereof or ivory, opera glasses and lorgnettes. and all other similar or naturally associated similar transactions, such tax to be
b. Perfumes and toilet waters; substances with the exception of coal, peat, paid by the buyer or purchaser
c. Yachts and other vessels intended for pleasure or sports. bituminous shale and/or stratified mineral before removal from the place of
deposits) production.
 TARLAC STATE UNIVERSITY - COLLEGE OF BUSINESS AND ACCOUNTANCY
2ND SEMESTER ACADEMIC YEAR 2021-2022
TAX 3 – SPECIAL TAXATION
EXCISE TAX ON SUGAR SWEETENED BEVERAGES
Non-alcoholic beverages of any constitution (liquid, powder or concentrates) that
are pre-packaged and sealed in accordance with the Food and Drug Administration
(FDA) standards, that contain caloric and/or non-caloric sweeteners added by the
manufacturers, and shall include, but not limited to the following, as described in
the Good Category System from Codex Alimentarius Food Category Descriptors:
a. Sweetened juice drinks
b. Sweetened tea
c. All carbonated beverages
d. Flavored water
e. Energy and sports drinks
f. Other powdered drinks not classified as milk, juice, tea and coffee
g. Cereal and grain beverages
h. Other non-alcoholic beverages that contain added sugar
Caloric Sweetener refers to a substance that is sweet and includes sucrose, fructose,
and glucose that produces a certain sweetness.
High Fructose Corn Syrup (HFCS) refers to a sweet saccharide mixture containing
fructose and glucose which is derived from corn and added to provide sweetness to
beverages, and which includes other similar fructose syrup preparations.
Non-Caloric Sweetener refers to a substance that is artificially or chemically
processed that produces a certain sweetness. These are substances which can be
directly added to beverages, such as aspartame, sucralose, saccharin, acesulfame
potassium, neotame, cyclamates and other non-nutritive sweeteners approved by
the Codex Alimentarius and adopted by the FDA.
Specific tax on sweetened beverages:
Tax Rate (per liter of
Product Description
volume capacity)
Using purely caloric sweeteners, and purely non-caloric P 6.00
sweeteners, or a mix of caloric and non-caloric sweeteners
Using purely high fructose corn syrup or in combination P 12.00
with any caloric or non-caloric sweetener
Using purely coconut sap sugar and purely steviol Exempt
glycosides
Exempted from excise tax on sugar sweetened beverages:
a. All milk products, including plaint milk, infant formula milk, follow-on milk,
growing-up milk, powdered milk, ready-to-drink milk, flavored milk and
fermented milk.
b. Soymilk and flavored soymilk
c. 100% Natural Fruit Juices
d. 100% Natural Vegetable Juices
e. Meal Replacement and Medically Indicated Beverages
f. Ground coffee, instant soluble coffee, and pre-packaged powered coffee
products.
Transfer of Raw Materials: manufacturers of sweetened beverages subject to
excise tax shall not be allowed to transfer or remove raw materials from the place
of production, except when the transfer or removal thereof is intended for further
processing to its other registered production or toll-manufacturing plants and shall
be accompanied by an Excise Tax Removal Declaration.
 TARLAC STATE UNIVERSITY - COLLEGE OF BUSINESS AND ACCOUNTANCY
2ND SEMESTER ACADEMIC YEAR 2021-2022
TAX 3 – SPECIAL TAXATION

EXCISE TAX ON NON-ESSENTIAL SERVICES OR INVASIVE COSMETIC PROCEDURE

20% based on gross receipts, net of excise tax and VAT.
Gross receipts derived from the performance of invasive cosmetic procedures,
surgeries and body enhancements directed solely towards improving, altering or
enhancing the patient's appearance and do not meaningfully promote the proper
functions of the body or prevent or treat illness or disease.

Exempted from excise tax on cosmetic procedures:

a. 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, tumor,
virus or infection.
b. Cases and treatments covered by the National Health Insurance Program.
c. Non-invasive Cosmetic Procedures

Any person performing the non-essential service shall be liable to pay the 5%
excise tax thereon using BIR Form No. 2200-C together with the Monthly Summary
of Cosmetic Procedures Performed as an attachment thereto, not more than 10 days
following the close of the month.