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Philippine Tax Update - Chan Robles Virtual Law Library

THE
NATIONAL INTERNAL REVENUE CODE
OF THE PHILIPPINES
[Tax Reform Act of 1997]
Republic Act No. 8424
AN ACT AMENDING THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED, AND FOR OTHER PURPOSES


Read the full text of the




TITLE VI
EXCISE TAXES ON CERTAIN GOODS
 
CHAPTER III
EXCISE TAX ON ALCOHOL PRODUCTS
 

SEC. 141. Distilled Spirits. - On distilled spirits, there shall be collected, subject to the provisions of Section 133 of this Code, excise taxes as follows:

    (a) If produced from the sap of nipa, coconut, cassava, camote, or buri palm or from the juice,syrup or sugar of the cane, provided such materials are produced commercially in the country where they are processed into distilled spirits, per proof liter, Eight pesos (P8.00): Provided, That if produced in a pot still or other similar primary distilling apparatus by a distiller producing not more than one hundred (100) liters a day, containing not more than fifty percent (50%) of alcohol by volume, per proof liter, Four pesos (P4.00);
    (b) If produced from raw materials other than those enumerated in the preceding paragraph, the tax shall be in accordance with the net retail price per bottle of seven hundred fifty milliliter (750 ml.) volume capacity (excluding the excise tax and the value-added tax) as follows:
      (1) Less than Two hundred and fifty pesos (P250) - Seventy-five pesos (P75), per proof liter;
      (2) Two hundred and fifty pesos (P250) up to Six hundred and Seventy-Five pesos (P675) - One hundred and fifty pesos (P150), per proof liter; and
      (3) More than Six hundred and seventy-five pesos (P675) - Three hundred pesos (P300), per proof liter.
    (c) Medicinal preparations, flavoring extracts, and all other preparations, except toilet preparations, of which, excluding water, distilled spirits for the chief ingredient, shall be subject to the same tax as such chief ingredient.
This tax shall be proportionally increased for any strength of the spirits taxed over proof spirits, and the tax shall attach to this substance as soon as it is in existence as such, whether it be subsequently separated as pure or impure spirits, or transformed into any other substance either in the process of original production or by any subsequent process.

"Spirits or distilled spirits" is the substance known as ethyl alcohol, ethanol or spirits of wine, including all dilutions, purifications and mixtures thereof, from whatever source, by whatever process produced, and shall include whisky, brandy, rum, gin and vodka, and other similar products or mixtures.cralaw

"Proof spirits" is liquor containing one-half (1/2) of its volume of alcohol of a specific gravity of seven thousand nine hundred and thirty-nine thousandths (0.7939) at fifteen degrees centigrade (15O C). A "proof liter" means a liter of proof spirits.cralaw

The rates of tax imposed under this Section shall be increased by twelve percent (12%) on January 1, 2000.cralaw

New brands shall be classified according to their current "net retail price".

For the above purpose, "net retail price" shall mean the price at which the distilled spirit is sold on retail in ten (10) major supermarkets in Metro Manila, excluding the amount intended to cover the applicable excise tax and the value-added tax as of October 1, 1996.cralaw

The classification of each brand of distilled spirits based on the average net retail price as of October 1, 1996, as set forth in Annex "A", shall remain in force until revised by Congress.
 
SEC. 142.  Wines. - On wines, there shall be collected per liter of volume capacity, the following taxes:

    (a) Sparkling wines/champagnes regardless of proof, if the net retail price per bottle (excluding the excise tax and value-added tax) is:
      (1) Five hundred pesos (P500) or less - One hundred pesos (P100); and
      (2) More than Five hundred pesos (P500) - Three hundred pesos (P300).
    (b) Still wines containing fourteen percent (14%) of alcohol by volume or less, Twelve pesos (P12.00); and
    (c) Still wines containing more than fourteen percent (14%) but not more than twenty-five percent (25%) of alcohol by volume, Twenty-four pesos (P24.00).
Fortified wines containing more than twenty-five percent of alcohol by volume shall be taxed as distilled spirits. "Fortified wines" shall mean natural wines to which distilled spirits are added to increase their alcoholic strength.

The rates of tax imposed under this Section shall be increased by twelve percent (12%) on January 1, 2000.cralaw

New brands shall be classified according to their current net retail price.cralaw

For the above purpose, "net retail price" shall mean the price at which wine is sold on retail in ten (10) major supermarkets in Metro Manila, excluding the amount intended to cover the applicable excise tax and the value-added tax as of October 1, 1996.cralaw

The classification of each brand of wines based on its average net retail price as of October 1, 1996, as set forth in Annex "B", shall remain in force until revised by Congress.
 
SEC. 143. Fermented Liquor. - There shall be levied, assessed and collected an excise tax on beer, lager beer, ale, porter and other fermented liquors except tuba, basi, tapuy and similar domestic fermented liquors in accordance with the following schedule:

    (a) If the net retail price (excluding the excise tax and value-added tax) per liter of volume capacity is less than Fourteen pesos and fifty centavos (P14.50), the tax shall be Six pesos and fifteen centavos (P6.15) per liter;
    (b) If the net retail price (excluding the excise tax and the value-added tax) the per liter of volume capacity is Fourteen pesos and fifty centavos (P14.50) up to Twenty-two pesos (P22.00), the tax shall be Nine pesos and fifteen centavos (P9.15) per liter;
    (c) If the net retail price (excluding the excise tax and the value-added tax) per liter of volume capacity is more than Twenty-two pesos (P22.00), the tax shall be Twelve pesos and fifteen centavos (P12.15) per liter.
Variants of existing brands which are introduced in the domestic market after the effectivity of Republic Act No. 8240 shall be taxed under the highest classification of any variant of that brand.

Fermented liquor which are brewed and sold at micro-breweries or small establishments such as pubs and restaurants shall be subject to the rate in paragraph (c) hereof.cralaw

The excise tax from any brand of fermented liquor within the next three (3) years from the effectivity of Republic Act No. 8240 shall not be lower than the tax which was due from each brand on October 1, 1996.cralaw

The rates of excise tax on fermented liquor under paragraphs (a), (b) and (c) hereof shall be increased by twelve percent (12%) on January 1, 2000.cralaw

New brands shall be classified according to their current net retail price.cralaw

For the above purpose, "net retail price" shall mean the price at which the fermented liquor is sold on retail in twenty (20) major supermarkets in Metro Manila (for brands of fermented liquor marketed nationally) excluding the amount intended to cover the applicable excise tax and the value-added tax. For brands which are marketed only outside Metro Manila, the "net retail price" shall mean the price at the which the fermented liquor is sold in five (5) major supermarkets in the region excluding the amount intended to cover the applicable excise tax and the value-added tax.cralaw

The classification of each brand of fermented liquor based on its average net retail price as of October 1, 1996, as set forth in Annex "C", shall remain in force until revised by Congress.cralaw

"A variant of brand" shall refer to a brand on which a modifier is prefixed and/or suffixed to the root name of the brand and/or a different brand which carries the same logo or design of the existing brand.cralaw

Every brewer or importer of fermented liquor shall, within thirty (30) days from the effectivity of R. A. No. 8240, and within the first five (5) days of every month thereafter, submit to the Commissioner a sworn statement of the volume of sales for each particular brand of fermented liquor sold at his establishment for the three-month period immediately preceding.cralaw

Any brewer or importer who, in violation of this Section, knowingly misdeclares or misrepresents in his or its sworn statement herein required any pertinent data or information shall be penalized by a summary cancellation or withdrawal of his or its permit to engage in business as brewer or importer of fermented liquor.cralaw

Any corporation, association or partnership liable for any of the acts or omissions in violation of this Section shall be fined treble the amount of deficiency taxes, surcharge, and interest which may be assessed pursuant to this Section.cralaw

Any person liable for any of the acts or omissions prohibited under this Section shall be criminally liable and penalized under Section 254 of this Code. Any person who willfully aids or abets in the commission of any such act or omission shall be criminally liable in the same manner as the principal.

If the offender is not a citizen of the Philippines, he shall be deported immediately after serving the sentence, without further proceedings for deportation.
  

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