Tax 3 Chapter 15 Excise Tax

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

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 and Manner of Computation

Types of Excise Definition Manner of Computation
Tax

1. Specific Tax Refers to the excise tax No. of Units/other

imposed which is based on measurements x Specific
weight or volume capacity Tax Rate
or any other physical unit
of measurement

2. Ad Valorem Tax Refers to the excise tax No. of units/other

imposed which is based on measurements x selling
selling price or other price of any specific value
specified value of the per unit x ad valorem tax
goods/ articles rate

Major Classification of Excisable Articles and Related Codal Section

1. Alcohol Products
a. Distilled Spirits
b. Wines
c. Fermented Liquors
2. Tobacco Products
a. Tobacco Products
b. Cigars & Cigarettes
c. Inspection Fees
3. Petroleum Products
4. Miscellaneous Articles
a. Automobiles
b. Non-essential Goods
c. Non-essential Service
d. Sweetened Beverages
5. Mineral Products
6. Sweetened Beverages
7. Invasive Cosmetic Surgery

NIRC as amended, Transfer and Business Taxation, Tabag

Persons Liable to Excise Tax
1. In general
a. On Domestic or Local Articles
● Manufacturer
● Producer
● Owner or person having possession of articles removed from the
place or 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
2. 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

● On Domestic products - before removal from the place of production

● On importer products - before release from the customs’ custody

EXCISE TAX RATES:

A. ALCOHOL PRODUCTS

NEW TAX RATES based on Republic Act No. 11467

PARTICULARS

Jan. 1, Jan. 23, Jan. 1, Jan. 1, 2022 Jan. 1,

2020 2020 2021 2023 Jan. 1, Jan. 1,
2024 2025

Distilled Spirits

1) AD VALOREM 20% 22% 22% 22% 22% 22% 22%

TAX RATE -
Based on the

NIRC as amended, Transfer and Business Taxation, Tabag

 Net Retail Price
(NRP) per proof
(excluding the
excise and
value-added
taxes);

and

Php Php 42 Php 47 Php 52 Php59 Php66 Shall be

2) SPECIFIC 24.34 increased
TAX - Per proof by 6% and
liter every year
thereafter

Excise Tax Due: shall be ad valorem tax plus the specific tax

NEW TAX RATES based on Republic Act No. 11467

PARTICULARS

Jan.23, Jan. 1, Jan. 1, 2022 Jan. 1,

2020 2021 2023 Jan. 1, Jan. 1, 2025 onwards
2024

WINES

PHP Php Php Php 59.55 Php 63.12 Shall be increased by

2) SPECIFIC 50.00 53.00 56.18 6% and every year
TAX - Per proof thereafter
liter

NEW TAX RATES based on Republic Act No. 11467

PARTICULARS

Jan 1, Jan.23, Jan. 1, Jan. 1, 2022 Jan. 1,

2020 2020 2021 2023 Jan. 1, Jan. 1, 2025
2024 onwards
Fermented Liqours (except tuba, basi, tapuy and similar fermented liquors.

NIRC as amended, Transfer and Business Taxation, Tabag

 Php Php Php Php Php 41.00 Php 43.00 Shall be increased by
2) SPECIFIC 26.43 35.00 37.00 39.00 6% and every year
TAX - Per proof thereafter
liter

RMC No. 18-2013 -

NOTE: Beginning January 23, 2020, the classification of wines was removed pursuant
to RA No, 11467. All types of wines are subject to specific excise tax rates per liter.

B. TOBACCO PRODUCTS

Particulars
NEW TAX RATES based on Republic Act No. 11467

Jan 1, Jan 23, Jan. Jan. Jan. 1, Jan. 1, 2024

2020 2020 2021 1, 2023
2022

HEATED TOBACCO PRODUCTS Php 10.00 Php 25.00 Php Php Php Specific tax rare sha
27.50 30.00 32.50 be increased by 5%
every year effective
2024

NEW TAX RATES based on Republic Act No. 11467

PARTICULARS

Jan 1, Jan. Jan. Jan. 1, Jan. 1, 2024 onwards

2020 2021 1, 2023
2022

Cigars

20% 20% 20% 20% 20%

Ad Valorem (a) Based on the Net

NIRC as amended, Transfer and Business Taxation, Tabag

 retail price per cigar (excluding the
excise and value-added taxes), and

(b) Per cigar Php 6.57 Php Php Php 7.38 Specific tax rate shall
6.83 7.10 be increased by 5%
every year effective
2024

Particulars
NEW TAX RATES based on Republic Act No. 11467

Jan 1, Jan. Jan. Jan. 1, Jan. 1, 2024

2020 2021 1, 2023
2022

1. Cigarettes packed by hand or Php 45.00 Php Php Php Specific tax rare shall
machine 50.00 55.00 60.00 be increased by 5%
every year effective
2024

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

NIRC as amended, Transfer and Business Taxation, Tabag

 EFFECTIVITY (RA 10963-TRAIN Law)
PRODUCT TYPE

January 1, January 1, January 1,

2018 2019 2020

(a) Lubricating oils and greases, including but not

limited to base 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 Php8.00 Php9.00 Php10.00
are subsequently reprocessed, re-refined or recycled, per liter
and kilogram of volume capacity or weight.

(b)Processed gas, per liter of volume capacity

(c)Waxes and petrolatum, per kilogram

(d)Denatured alcohol to be used for motive power , per

liter of volume capacity

(e)Asphalt, per kilogram

Php7.00 Php9.00 Php10.00

(f)Naphtha, regular gasoline, pyrolysis gasoline and
other similar products of distillation, per liter of
volume capacity

(g)Unleaded premium gasoline, per liter of volume

capacity

(h)Kerosene, per liter of volume capacity Php 3.00 Php4.00 Php5.00

Php 4.00 Php 4.00 Php 4.00

(i)Aviation turbo jet fuel,aviation gas, per liter of
volume capacity

(j)Kerosene when used as aviation fuel, per liter of

volume capacity

NIRC as amended, Transfer and Business Taxation, Tabag

 Php4.50 Php 6.00
(k)Diesel fuel oil, and on similar fuel oils having more
or less the same generating power, per liter of volume
capacity
Php2.50

(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

(n)Petroleum coke, per metric ton

Php1.00
(o)Liquified petroleum gas, per kilogram Php2.00 Php 3.00

Php0.00 Php0.00
(p)Naphtha and pyrolysis gasoline, when used as raw
material in the production of petrochemical products
or in the refining of petroleum products, or as
replacement fuel for natural-gas-fired-combined cycle Php0.00
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 production of petrochemical products, per
kilogram

(r)Petroleum coke when used as feedstock to any

power generating facility, per metric ton

The said revised Excise Tax rates shall not apply under the following instances:
a) Lubricating oils and greases produced from basestocks and additives on which the Excise Tax
has already been paid; and
b) Unless otherwise provided by special laws, if the denatured alcohol is mixed with gasoline,
the Excise Tax on which has already been paid, only the alcohol content shall be subject to the
prescribed tax. The removal of denatured alcohol of not less than one hundred eighty degrees
(180°) proof 90% absolute alcohol shall be deemed to have been removed for motive power,
unless shown otherwise.

D. MINERALS AND MINERAL PRODUCTS

NIRC as amended, Transfer and Business Taxation, Tabag

 TAX RATES (RA 10963-TRAIN Law)
PRODUCT TYPE

January 1, 2018 - Php50.00

Coal and coke (Domestic and Imported) January 1, 2019 - Php100.00
January 1, 2020 - Php150.00
and onwards

Four percent (4%) based on the actual market

Nonmetallic Minerals and Quarry Reources value of the gross output thereof at the time of
(Locally extracted or produced) removal

Nonmetallic Minerals and Quarry Resources Four percent (4%) based on the value used by
(Imported) 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 Exempt

gas

All Metallic Minerals (locally extracted or produced Four percent (4%) based on the actual market
copper, gold, chromite and other metallic value of the gross output thereof at the time of
minerals) removal

Imported copper, gold, chromite and other metallic Four percent (4%) based on the value used by
minerals BOC in 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

NIRC as amended, Transfer and Business Taxation, Tabag

 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 (Ad valorem tax)

NET MANUFACTURER'S PRICE/IMPORTER'S SELLING TAX RATES (RA 10963 (TRAIN Law)
PRICE

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%

Note: Buses, trucks, cargo vans, jeeps/jeepney substitutes, single cab chassis, and
special-purpose vehicles shall not be considered as automobiles.

RR No. 24-2018: Purely Electric Vehicles shall be exempt from the Excise tax on
automobiles. Hybrid Vehicles shall be subject to 50% of the applicable Excise Tax
rates on automobiles.

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 (Ad valorem)

NIRC as amended, Transfer and Business Taxation, Tabag

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 Php6.00

mix of caloric and non-caloric sweeteners

Using purely high fructose corn syrup or in combination with any caloric or Php12.00
non-caloric sweetener

Using purely coconut sap sugar and purely steviol glycosides Exempt

Note: The excise tax on sweetened beverages is imposed whether the beverage is in
liquid form or when the beverage is sold as a concentrate

Exclusions: the following products are not subject to excise tax:

1. 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.
Milk products refers to products obtained by any processing of milk, which may
contain food additives, and other ingredients functionally necessary for the
processing.
* Dairy products are not synonymous with milk products. Only milk products are covered by
the exemption.
2. Soymilk and flavored soymilk
3. 100% Natural Fruit Juices
4. 100% Natural Vegetable Juices
5. Meal Replacement and Medically Indicated Beverages
6. Ground coffee, instant soluble coffee, and pre-packaged powered coffee products.

H. INVASIVE COSMETIC PROCEDURES - (RA 10963-TRAIN Law)

SERVICE Tax Rate

Performance of Services on Invasive Cosmetic Procedures 5%

(Ad valorem)

NIRC as amended, Transfer and Business Taxation, Tabag

Note: The excise tax on invasive cosmetic procedure must be paid within 10 days
following the close of the month.

RR: No. 2-2019: There shall be levied, assessed and collected an Excise Tax
equivalent to 5% based on gross receipts from the performance of services, net of
Excise Tax and VAT on 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.

NIRC as amended, Transfer and Business Taxation, Tabag