TAX II - Excise

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BASIC CONCEPT:

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:

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)

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)

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

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Others:

On Indigenous Petroleum

Local Sale, Barter or Transferoo First buyer, purchaser or transferee

Exportationoo Owner, lessee, concessionaire or

operator of the mining claim

TIME OF PAYMENT:

In General

On domestic products

o Before removal from the place of production

On imported products

o Before release from the customs' custody

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EXCISE TAX RATES:

A. ALCOHOL PRODUCTS

PARTICULARSNEW TAX RATES based on Republic Act No. 10351 Remarks

2018onwards2013 2014 2015 2016 2017

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 taxes);and

15% 15% 20% 20% 20% 20%

2) SPECIFIC TAX - Per proof liter Php20 Php20 Php20 Php20.80 Php21.63

Effective 1/1/2016, the specific tax rate shall be 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:


thereafter

Php500.00 or less Php250 Php260 Php270.40 Php281.22 Php292.47

More than Php500.00 Php700 Php728 Php757.12 Php787.40 Php818.90

2) Still wines and carbonated wines containing 14% of alcohol by volume or less

Php30.00 Php31.20 Php32.45 Php33.75 Php35.10

3) Still wines and carbonated wines containing more than 14% (of alcohol by volume) but not more 25% of alcohol by volume


4) Fortified wines containing more than 25% of alcohol by volume Taxed as distilled spirits

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 specific tax rate shall be increased by 4% every year

thereafter

Php 50.60 and below Php15.00 Php17.00 Php19.00 Php21.00 Php23.50

More than Php 50.60 Php20.00 Php21.00 Php22.00 Php23.00 Php23.50

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2) If brewed and sold at microbreweries or small establishments such as pubs and restaurants, regardless of the NRP



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

PARTICULARSNEW TAX RATES based on Republic Act No. 10351 Remarks

2018onwards2013 2014 2015 2016 2017

A. TOBACCO PRODUCTS, per kilogram

1. Tobacco Products

(a) Tobacco twisted by hand or reduced into a condition to be consumed in any manner other than the ordinary mode of drying and curing;



thereafter

(b) Tobacco prepared or partially prepared 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 sweepings of tobacco;


2. Chewing tobacco unsuitable for use in any other manner


B. CIGARS, per cigar

3. Cigars


thereafter

(a) Based on the NRP per cigar (excluding the excise and value-added taxes), and

20% 20% 20% 20% 20%

(b) Per cigar Php5.00 Php5.20 Php5.41 Php5.62 Php5.85

C. CIGARETTES , per pack

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1. Cigarettes packed by hand Php12.00 Php15.00 Php18.00 Php21.00 Php30.00Effective 1/1/2018, the specific tax rate shall be increased by 4% every year thereafter

2. Cigarettes packed by machine, where the NRP (excluding excise and VAT) per pack is:

(a) Php11.50 and below Php12.00 Php17.00 Php21.00 Php25.00 Php30.00

(b) More than Php11.50 Php25.00 Php27.00 Php28.00 Php29.00 Php30.00

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

PRODUCT TYPE TAX RATES

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

P 4.50 per liter

Processed gas P 0.05 per liter

Waxes and petrolatum P 3.50 per kilogram

Denatured alcohol, if used for motive power [i.e. one hundred eighty (180) proof ninety percent (90%) absolute alcohol]. Provided, that unless otherwise provided by special laws, if the denatured alcohol is mixed with gasoline, the excise tax which has already been paid, only the alcohol content shall be subject to tax

P 0.05 per liter

Naphtha, regular gasoline and other similar products of distillation P 4.35 per liter

Naphtha used as raw material in the production of petrochemical products or as replacement fuel for natural P 0.00 per liter

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gas-fired combined cycle power plant, in lieu of locally-extracted natural gas during the non-availability thereof

Leaded premium gasoline P 5.35 per liter

Unleaded premium gasoline P 4.35 per liter

Aviation turbo jet fuel P 3.67 per liter

Kerosene P 0.00 per liter

Kerosene used as aviation fuel P 3.67 per liter

Diesel fuel oil, and on similar fuel oils having more or less the same generating power P 0.00 per liter

Liquefied Petroleum Gas ; Provided, that if used for motive power, it shall be taxed at the equivalent rate as the Excise Tax on diesel fuel oil

P 0.00 per liter

Asphalt P 0.56 per kilogram

Bunker fuel oil, and on similar fuel oils having more or less the same generating power P 0.00 per liter

D. MINERALS AND MINERAL PRODUCTS

PRODUCT TYPE TAX RATES

On coal and coke Ten Pesos (P10.00) per metric ton

All mineral and mineral products (non-metallic), quarry resources Two percent (2%) bases on the actual market value, in the case of those locally-extracted or produced; and, in the case of importation or the value used by the Bureau of Customs in determining tariff and customs duties, net of Excise Tax and Value-Added Tax.

On locally-extracted natural gas and liquefied natural gas P0.00

On indigenous petroleum Three percent (3%) of the fair international market price thereof

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.

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E. AUTOMOBILES AND OTHER MOTOR VEHICLES

OVER UP TO RATE

0 P 600,000 2%

P600,000 P 1,100,000 P 12,000 + 20% in excess of P 600,000

P1,100,000 P2,100,000 P112,000+ 40% in excess of P1,100,000

P2,100,000 over P512,000 + 60% in excess of P2,100,000

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

Documents

TAX II - Excise