Section 1. Section 138 of the National Internal Revenue Code,
as amended, is hereby further amended to read as follows:
"Sec. 138. Distilled Spirits. — On distilled spirits,
there shall be collected, subject to the provisions of Section 130 of
this Code, specific 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 post still or other
similar primary distilling apparatus by a distiller producing not more
than 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 (P250.00)
— Seventy-five pesos (P75.00), per proof liter;
"(2) Two hundred and fifty pesos (P250.00) up to Six
hundred and seventy-five pesos P675.00) — One hundred and fifty pesos
(P150.00), per proof liter; and
"(3) More than Six hundred and seventy-five pesos
(P675.00) — Three hundred pesos (P300.00) per proof liter.
"(c) Medicinal preparations, flavoring extracts, and
all other preparations, except toilet preparations, of which, excluding
water, distilled spirits form the chief ingredients, shall be subject
to the same tax 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.
"'Proof spirits' is liquor containing ½ of its volume of alcohol
of a specific gravity of seven thousand nine hundred and thirty-nine
thousands (0.7939) at fifteen degrees centigrade. A proof liter means a
liter of proof spirits.
"'The rates of tax imposed under this section shall be increased by
twelve percent (12%) on January 1, 2000.
"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 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.
"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. 2. Section 139 of the National Internal
Revenue Code, as amended, is hereby further amended to read as follows:
"Sec. 139. 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 the
value-added tax) is:
"(1) Five hundred pesos (P500.00) or less — One
hundred pesos (P100.00); and
"(2) More than Five hundred pesos (P500.00) — Three
hundred pesos (P300.00);
"(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 (25%) 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, 200.
"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
wine is sold on retail in 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.
"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. 3. Section 140 of the National Internal
Revenue Code, as amended, is hereby further amended to read as follows:
"Sec. 140. Fermented Liquor. — There shall be
levied, assessed and collected a specific tax on beer, larger
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 specific
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 specific
tax and the valued-added tax) 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 specific
tax and the value-added tax) per liter of volume capacity is more than
Twenty-two pesos (P22.0), 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 this Act shall be taxed under the
highest classification of any variant of that brand.
"Fermented liquor which are brewed and sold at microbreweries or small
establishments such as pubs and restaurants shall be subject to the
rate in paragraph (c ) hereof.
"The specific tax from any brand of fermented liquor within the next
three (3) years from the effectivity of this Act shall not be lower
than the tax which was due from each brand on October 1, 1996.
"The rates of specific tax on fermented liquor under paragraphs (a),
(b) and (c ) hereof shall be increased by twelve percent (12%) on
January 1,2000.
"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 fermented liquor is sold on retail in 20 major supermarkets in
Metro Manila (for brands of fermented liquor marketed nationally),
excluding the amount intended to cover the applicable excise tax and
value-added tax. For brands which are marketed only outside Metro
Manila, the net retail price shall mean the price at which the
fermented liquor is sold in five major supermarkets in the region
excluding the amount intended to cover the applicable excise tax and
the value-added tax.
"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.
"A variant of a 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.
"Every brewer or importer of fermented liquor shall, within thirty (30)
days from the effectivity of this Act, and within the first five (5)
days of every month thereafter, submit to the Commissioner of Internal
Revenue 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.
"Any brewer of 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.
"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, surcharges, and interest which may be
assessed pursuant to this section.
"Any person liable for any of the acts or omissions prohibited under
this section shall be criminally liable and penalized under Sec. 253
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."
Sec. 4. Section 142 of the National Internal
Revenue Code, as amended, is hereby further amended to read as follows:
"Sec. 142. Cigars and cigarettes. — (a) Cigars. —
There shall be levied, assessed and collected on cigars a tax of One
peso (P1.00) per cigar.
"(b) Cigarettes packed by hand. — There shall be
levied, assessed and collected on cigarettes packed by hand a tax of
Forty centavos (0.40) per pack.
"(c ) Cigarettes packed by machine. — There shall be
levied, assessed and collected on cigarettes packed by machine a tax at
the rates prescribed below:
"(1) If the net retail price (excluding the excise
tax and the value-added tax) is above Ten pesos (P10.00) per pack, the
tax shall be Twelve pesos (P12.00) per pack;
"(2) If the net retail price (excluding the excise
tax and the value-added tax) exceeds Six pesos and fifty centavos
(P6.50) but does not exceed Ten pesos (P10.00) per pack, the tax shall
be Eight pesos (P8.00) per pack;
"(3) If the net retail price (excluding the excise
tax and the value-added tax) is Five pesos (P5.00) but does not exceed
Six pesos and fifty centavos (P6.50) per pack, the tax shall be Five
pesos (P5.00) per pack;
"(4) If the net retail price (excluding the excise
tax and the valued-added tax) is below Five pesos (P5.00) per pack, the
tax shall be One peso (P1.00) per pack.
"Variants of existing brands of cigarettes which are introduced in the
domestic market after the effectivity of this Act shall be taxed under
the highest classification of any variant of that brand.
"The specific tax from any brand of cigarettes within the next three
(3) years of effectivity of this Act shall not be lower than the tax is
due from each brand on October 1, 1996: provided, however, that in
cases where the specific tax rates imposed in paragraphs (1), (2), (3)
and (4) hereinabove will result in an increase in excise tax of more
than seventy percent (70%), for a brand of cigarette, the increase
shall take effect in two tranches: fifty percent (50%) of the increase
shall be effective in 1997 and one hundred percent (100%) of the
increase shall be effective in 1998.
"Duly registered or existing brands of cigarettes or new brands thereof
packed by machine shall only be packed in twenties.
"The rates of specific tax on cigars and cigarettes under paragraphs
(1), (2), (3) and (4) hereof, shall be increased by twelve percent
(12%) on January 1, 2000.
"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 cigarette is sold on retail in 20 major supermarkets in Metro
Manila (for brands of cigarettes 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 which the cigarette is sold in
five major supermarkets in the region excluding the amount intended to
cover the applicable excise tax and the value-added tax.
"The classification of each brand of cigarettes based on its average
net retail price as of October 1, 1996, as set forth in Annex 'D' of
this Act, shall remain in force until revised by Congress.
"Variant of a 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.
"Manufacturers and importers of cigars and cigarettes shall, within
thirty (30) days from the effectivity of this Act, and within the first
five (5) days of every month thereafter submit to the Commissioner of
Internal Revenue a sworn statement of the volume of sales for each
particular brand of cigars and/or cigarettes sold at his establishment
for the three-month period immediately preceding.
"Any manufacturer 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, upon
discovery, be penalized by a summary cancellation or withdrawal of his
or its permit to engage in business as manufacturer or importer of
cigars or cigarettes.
"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, surcharges, and interest which may be
assessed pursuant to this section.
"Any person liable for any of the acts or omissions prohibited under
this section shall be criminally liable and penalized under Sec. 253
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."
Sec. 5. The tax rates prescribed under this Act
shall take effect on January 1, 1997.
Sec. 6. Internal revenues stamps, whether of a bar
code or fuson design, shall be firmly and conspicuously affixed on each
pack of cigars and cigarettes subject to specific tax in the manner and
form as prescribed by the Commissioner of Internal Revenue upon
approval of the Secretary of Finance.
Excisable articles such as distilled spirits, fermented liquor, cigars
and cigarettes which are sold tax and duty free in all authorized
establishments shall be marked tax and duty free in a manner and form
prescribed by the Secretary of Finance.
Sec. 7. The classifications set forth in Annex "A"
for distilled spirits, Annex "B" for wines, Annex "C" for fermented
liquor and Annex "D" for cigarettes are hereby adopted and made an
integral part of this Act.
Sec. 8. Fifteen percent (15%) of the incremental
revenue collected from the excise tax on tobacco products under this
Act shall be allocated and divided among the provinces producing burley
and native tobacco in accordance with the volume of tobacco leaf
production. The fund shall be exclusively utilized for programs in
pursuit of the following objectives:
(a) Cooperative projects that will enhance better
quality of agricultural products and increase income and productivity
of farmers;
(b) Livelihood projects particularly the development
of alternative farming system to
enhance farmer's income;
(c ) Agro-industrial projects that will enable
tobacco farmers to be involved in the management and subsequent
ownership of projects such as post harvest and secondary processing
like cigarette manufacturing and by-product utilization.
The Department of Budget and Management in consultation with the
Oversight Committee created hereunder shall issue the corresponding
rules and regulations governing the allocation and disbursement of this
fund.
Sec. 9. An Oversight Committee is hereby created
which shall be composed of the Chairmen of the Committees on Ways and
Means of the Senate and the House of Representatives and four (4)
additional members from each House to be designated by the Senate
President and the Speaker of the House of Representatives,
respectively. The Oversight Committee shall monitor and ensure the
proper implementation of this Act.
Section 10. The Secretary of Finance shall, upon the
recommendation of the Commissioner of Internal Revenue, promulgate the
necessary rules and regulations for the effective implementation of
this Act.
Section 11. If any of the provisions of this Act is
declared invalid by competent court, the remainder of this Act or any
provision not affected by such declaration of invalidity shall remain
in force and effect.
Section 12. All laws, decrees, ordinances, rules and
regulations, executive or administrative orders, and such other
presidential issuances as are inconsistent with any of the provisions
of this Act are hereby repealed, amended or otherwise modified
accordingly.
Section 13. This Act shall take effect on January 1,
1997.
Approved: November 22, 1996
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