EXCISE TAXES

DEFINITION OF EXCISE TAX

 EXCISE TAXES

Excise taxes apply to taxes on goods manufactured or

produced in the Philippines for domestic sales or
consumption or for any other disposition and to things
imported as well as services performed in the Philippine,
which tax shall be in addition to the value-added tax.
 LETS Concept and Nature of

DISCUSS! Excise Taxes

 Considered Taxes on
An Indirect Tax
Production

Basically excise tax is an indirect tax,

These excise taxes may be considered
excise taxes are directly levied upon the
taxes on production as they are
manufacturer or importer upon removal
collected only from the manufacturers
of the taxable goods from its place of
and producers. production or from the customs custody.

These taxes, however, may be actually

passed on to the end consumer as part
of the transfer value or selling price of the
goods sold, bartered or exchanged.
 GOODS & SERVICES

SUBJECT TO EXCISE TAX

 GOODS SUBJECT TO EXCISE TAXES

Excise taxes apply to : Excise taxes specifically apply to :

a) Alcohol products,
a) goods manufactured or
b) Tobacco products,
produced in the Philippines for
domestic sales or consumption or c) Petroleum products,

for any other disposition, d) Miscellaneous articles such

as automobiles and non-

b) things imported, as well as essential goods,

e) Non-essential services,
c) services rendered in the f) Sweetened beverages, and
Philippines g) Mineral products

Note : The excise tax imposed herein shall be in addition to the value-added tax imposed.
 KINDS OF EXCISE TAXES

Specific Tax Ad Valorem Tax

'Specific tax' is an excise tax ‘Ad valorem tax’ is an excise tax

imposed and based on weight or imposed and based on selling

price or other specified value of
volume capacity or any other
the good.
physical unit of measurement.
 a) Excise tax on Cigarettes Packed by Hand

b) Excise tax on Cigarettes Packed by Machine

EXAMPLES OF SPECIFIC TAX
c) Excise tax on petroleum products

d) Excise tax on mineral products

e) Excise tax on sweetened beverages

 a) Excise tax on alcoholic products

EXAMPLES OF b) Excise tax on cigars

AD VALOREM TAX
c) Excise tax on automobiles

d) Excise tax on non-essential services

 MANNER OF COMPUTATION OF EXCISE TAX

a) Specific tax = Units x Specific tax rate

b) Ad valorem tax = Units x SP/unit x Ad

valorem tax rate
FILING OF RETURN

AND PAYMENT OF

EXCISE TAX ON

DOMESTIC

PRODUCTS
Persons Liable to File a Return,

Filing of Return on Removal and

Payment of Tax.
 A. PERSONS LIABLE TO FILE A RETURN

Every person liable to pay excise tax shall file a separate return for each
place of production setting forth, among others:

a) the description and quantity or volume of products to be removed,

b) the applicable tax base and the amount of tax due thereon.

In the case of indigenous petroleum, natural gas or liquefied natural gas,

the excise tax shall be paid by the first buyer, purchaser or transferee for
local sale, barter or transfer.

Excise tax on exported products shall be paid by the owner, lessee,

concessionaire or operator of the mining claim.

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.
 B. TIME FOR FILING OF RETURN AND PAYMENT OF THE TAX

Unless otherwise specifically allowed, the return shall be filed and the excise tax
paid by the manufacturer or producer before removal of domestic products
from place of production.

Excise tax on locally manufactured petroleum products and indigenous

petroleum levied under Sections 148 (Manufactured Oil and Other Fuels) and
151(A)(4) (Indigenous Petroleum), respectively, shall be paid:

a) within ten (10) days from the date of removal of such products for the period
from January 1, 1998 to June 30, 1998;

b) within five (5) days from the date of removal of such products for the period
from July 1, 1998 to December 31, 1998; and,

c) before removal from the place of production of such products from January
1, 1999 and thereafter.
Excise tax on nonmetallic mineral or mineral products, or quarry resources shall be
due and payable upon removal of such products from the locality where mined or
extracted.

With respect to the excise tax on locally produced or extracted metallic mineral or
mineral products, the person liable shall file a return and pay the tax within fifteen (15)
days after the end of the calendar quarter when such products were removed subject
to such conditions as may be prescribed by rules and regulations to be promulgated
by the Secretary of Finance, upon recommendation of the Commissioner.

For this purpose, the taxpayer shall file a bond in an amount which approximates the
amount of excise tax due on the removals for the said quarter.

The foregoing rules notwithstanding, for imported mineral or mineral products,

whether metallic or nonmetallic, the excise tax due thereon shall be paid before their
removal from customs custody.
 C. PLACE OF FILING OF 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.
 D. EXCEPTIONS

The Secretary of Finance, upon recommendation of the

Commissioner may, by rules and regulations, prescribe:

(a) The time for filing the return at intervals other than
the time prescribed in the preceding paragraphs for a
particular class or classes of taxpayers after
considering factors such as volume of removals,
adequate measures of security and such other
relevant information required to be submitted under
the pertinent provisions of this
Code; and
(b) The manner and time of payment of excise taxes other than as
herein prescribed, under a tax prepayment, advance deposit or
similar schemes. In the case of locally produced of extracted
minerals and mineral products or quarry resources where the mine
site or place of extraction is not the same as the place of processing
or production, the return shall be filed with and the tax paid to the
Revenue District Office having jurisdiction over the locality where the
same are mined, extracted or quarried: Provided, however, That for
metallic minerals processed abroad, the return shall be filed and the
tax due thereon paid to the Revenue District Office having jurisdiction
over the locality where the same are mined, extracted or quarried.
Determination of Gross Selling

Price of Goods Subject to Ad

Valorem Tax
Unless otherwise provided, the price, A.
excluding the value-added tax, at

which the goods are sold at

PRICE

wholesale in the place of production

EXCLUDING

or through their sales agents to the

public shall constitute the gross
VAT
selling price.
 B.
If the manufacturer also sells or allows

such goods to be sold at wholesale in MANUFACTURER

another establishment of which he is ALSO SELLS OR
the owner or in the profits of which he
ALLOWS GOODS TO
BE SOLD AT
has an interest, the wholesale price in
WHOLESALE IN
such establishment shall constitute the ANOTHER
gross selling price. ESTABLISHMENT HE
OWNS

Should such price be less than the cost C.

of manufacture plus expenses incurred

until the goods are finally sold, then a SHOULD PRICE BE

proportionate margin of profit, not less LESS THAN THE
than ten percent (10%) of such COST OF
manufacturing cost and expenses, MANUFACTURE
shall be added to constitute the gross

selling price.

Manufacturer's or Producer's

Sworn Statement

Every manufacturer or producer of goods

or products subject to excise taxes shall file
with the Commissioner on the date or
dates designated by the latter, and as often
as may be required, a sworn statement
showing, among other information:

A) the different goods or products

manufactured or produced and their
corresponding gross selling price or market
value,

B) together with the cost of manufacture or

production

C) plus expenses incurred or to be incurred

until the goods or products are finally sold.
Credit for Excise tax on Goods

Actually Exported

 A. WHEN GOODS LOCALLY PRODUCED OR MANUFACTURED

ARE REMOVED AND ACTUALLY EXPORTED

When goods locally produced or manufactured are removed and

actually exported without returning to the Philippines, whether so
exported in their original state or as ingredients or parts of any
manufactured goods or products, any excise tax paid thereon
shall be credited or refunded upon submission of the proof of
actual exportation and upon receipt of the corresponding foreign
exchange payment.
 B. EXCISE TAX ON MINERAL PRODUCTS, EXCEPT COAL AND COKE

The excise tax on mineral products, except coal and coke,

imposed under Section 151 shall not be creditable or refundable
even if the mineral products are actually exported.
PAYMENT OF EXCISE TAXES ON IMPORTED

ARTICLES

PERSON LIABLE

 A. EXCISE TAX ON IMPORTED ARTICLES

Excise taxes on imported articles shall be paid

by the owner or importer to the Custom Officers,
conformably with the regulations of the
Department of Finance and before the release
of such articles from the customs house, or by
the person who is found in possession of articles
which are exempt from excise taxes other than
those legally entitled to exemption.
B. TAX-FREE ARTICLES BROUGHT OR IMPORTED INTO THE PHILIPPINES
BY PERSONS, ENTITIES, ORAGENCIES EXEMPT FROM TAX

In the case of tax-free articles brought or

imported into the Philippines by persons, entities,
or agencies exempt from tax which are
subsequently sold, transferred or exchanged in
the Philippines to non-exempt persons or entitles,
the purchasers or recipients shall be considered
the importers thereof, and shall be liable for the
duty and internal revenue tax due on such
importation.
C. IMPORTATION OF CIGARS AND CIGARETTES, DISTILLED SPIRITS,
FERMENTED LIQUORS AND WINES INTO THE PHILIPPINES

The provision of any special or general law to the

contrary notwithstanding, the importation of
cigars and cigarettes, distilled spirits, fermented
liquors and wines into the Philippines, even if
destined for tax and duty free shops, shall be
subject to all applicable taxes, duties, charges,
including excise taxes due thereon.
D. NON-LABELING OR RE-SELLING OF CERTAIN GOODS PUNISHABLE

Cigars and cigarettes, distilled spirits and wines

within the premises of all duty-free shops which
are not labeled as herein above required, as well
as tax and duty-free articles obtained from a
duty free shop and subsequently found in a non
duty-free shop to be offered for resale shall be
confiscated, and the perpetrator of such non-
labeling or re-selling shall be punishable under
the applicable provisions of this Code.
 E. DESTRUCTION OF CONFISCATED ARTICLES

Articles confiscated shall

de destroyed using the
most environmentally friendly method available
in accordance with the rules and regulations to
be promulgated by the Secretary of Finance,
upon recommendation of the Commissioners of
Customs and Internal Revenue.
 F. LIEN ON THE ARTICLE

The tax due on any such

goods, products,
machinery, equipment or other similar
articles shall constitute a lien on the article
itself, and such lien shall be superior to all
other charges or liens, irrespective of the
possessor thereof.


RATE AND BASIS OF THE

EXCISE TAX ON IMPORTED

ARTICLES

Unless otherwise specified imported

articles shall be subject to the same
rates and basis of excise taxes
applicable to locally manufactured
articles.
 MODE OF COMPUTING
CONTENTS OF CASK OR

PACKAGE
Every fractional part of a proof liter equal to or
greater than a half liter in a cask or package
containing more than one liter shall be taxed
as a liter, and any smaller fractional part shall
be exempt but any package of spirits, the
total content of which are less than a proof
liter, shall be taxed as one liter.