Question & AnswerQ&A (Republic Act No. 11467)
Under Section 109, sale or importation of prescription drugs and medicines for diabetes, high cholesterol, and hypertension are exempt from VAT beginning January 1, 2020; and for cancer, mental illness, tuberculosis, and kidney diseases beginning January 1, 2023, provided the Department of Health issues a list of approved drugs and medicines within 60 days of the Act's effectivity.
The ad valorem excise tax on distilled spirits is 22% of the net retail price excluding excise and VAT per proof, effective January 1, 2020.
From January 1, 2020, to January 1, 2024, the specific excise tax per proof liter on distilled spirits increases as follows: P42.00 (2020), P47.00 (2021), P52.00 (2022), P59.00 (2023), and P66.00 (2024). Starting January 1, 2025, it increases by 6% annually through revenue regulations.
An excise tax of P50.00 per liter is imposed on wines starting January 1, 2020, increasing by 6% every year thereafter through revenue regulations.
If the appraised value of the seized articles is not more than P250,000, the offender faces a fine of not less than P100,000 but not more than P200,000 and imprisonment from 60 to 100 days.
The excise tax rate for heated tobacco products is P25.00 per pack of 20 units or packaging combinations of not more than 20 units, effective January 1, 2020.
Vapor products mean electronic nicotine and non-nicotine delivery systems (ENDS/ENKDS) that include a liquid or gel that transforms into an aerosol without combustion using a mechanical or electronic heating element or battery, including cartridges, tanks, and the device itself, regardless of nicotine content.
Such offense is punishable by a fine of not less than ten times the amount of excise tax plus VAT due but not less than P200,000 and not more than P500,000, and imprisonment from 4 to 6 years.
100% of revenues are allocated as follows: 60% for implementation of the Universal Health Care Act; 20% for nationwide medical assistance and Health Facilities Enhancement Program determined by the DOH; and 20% for attaining Sustainable Development Goals determined by NEDA.
The BIR can supervise establishments producing taxable goods, prescribe rules to ensure sanitary output and safeguard revenue, including appointing third parties for monitoring and excluding excisable goods from duty-free barter transactions. Internal revenue officers may enter premises upon court order for examination and seizure related to excisable goods.