Question & AnswerQ&A (Republic Act No. 9334)
The excise tax rate is Eleven pesos and sixty-five centavos (P11.65) per proof liter.
The tax is based on the net retail price per bottle (750 ml volume capacity excluding excise and VAT) categorized into three brackets with tax rates of One hundred twenty-six pesos (P126.00), Two hundred fifty-two pesos (P252.00), and Five hundred four pesos (P504.00) per proof liter depending on the price range.
Proof spirits is liquor containing one-half of its volume of alcohol of a specific gravity of 0.7939 at 15 degrees centigrade. A proof liter means one liter of proof spirits.
They must submit a sworn statement of the volume of sales for each particular brand every three months, within 30 days from the effectivity of this Act and within the first five days every third month thereafter.
Penalties include summary cancellation or withdrawal of business permits, fines amounting to treble the deficiency taxes, surcharges, and interest, and criminal liability under Section 254 of the Tax Code. Non-citizens will be deported after serving the sentence.
Wines are classified into sparkling wines/champagnes (two price brackets), still wines containing 14% alcohol or less, and still wines containing more than 14% up to 25% alcohol by volume. Fortified wines with over 25% alcohol are taxed as distilled spirits.
A tax of One peso (P1.00) per kilogram is imposed on certain tobacco products including tobacco twisted by hands, prepared tobacco, and fine-cut shorts and refuse. Tobacco specially prepared for chewing is taxed at seventy-nine centavos (P0.79) per kilogram.
Cigars are subject to ad valorem excise tax: 10% on net retail price per cigar if price is P500 or less, and P50 plus 15% of the amount over P500 if the net retail price exceeds P500.
Hand-packed cigarettes have increasing fixed per pack taxes from P2.00 in 2005 to P2.72 in 2011. Machine-packed cigarettes are taxed on a tiered basis depending on net retail price per pack, with rates increasing every two years from 2005 to 2011.
Excise taxes on imported articles must be paid by the owner or importer to Customs Officers before release. Importation of cigars, cigarettes, distilled spirits, fermented liquors and wines to duty-free shops are subject to applicable taxes except when directly imported by government-owned duty-free shops which are exempted from duties but not excise taxes and must be labeled as duty-free not for resale.