Taxation on Wines
- Specific excise tax per liter of volume capacity based on type and net retail price
- Sparkling wines/champagnes taxed at P100 or P300 depending on price threshold (P500)
- Still wines taxed at P12 or P24 depending on alcohol concentration (14% or less, more than 14% but not exceeding 25%)
- Fortified wines (above 25% alcohol by volume) taxed as distilled spirits
- Tax rates increased by 12% from January 1, 2000
- Net retail price classification based on major supermarkets in Metro Manila, excluding taxes
- Brand classifications effective as of October 1, 1996, until amended by Congress
Taxation on Fermented Liquor
- Specific excise tax imposed on beer, lager, ale, porter, and other fermented liquors excluding tuba, basi, tapuy and similar domestic variants
- Rates differentiated by net retail price per liter: P6.15 (<P14.50), P9.15 (P14.50-P22), P12.15 (>P22)
- Variants of brands taxed according to highest variant classification
- Microbrewery and small establishment brewed liquor taxed at highest rate
- Minimum tax guarantees for brands set at levels not lower than October 1, 1996, for three years
- Tax rates increased by 12% effective January 1, 2000
- Net retail price determined by prices from major supermarkets in Metro Manila or respective regions
- Monthly sworn statement of sales volume required from brewers/importers; penalties for misdeclaration include permit cancellation and fines
- Criminal liabilities for violations with deportation provisions for non-citizens
Taxation on Cigars and Cigarettes
- Cigars taxed at P1 per cigar
- Cigarettes packed by hand taxed at P0.40 per pack
- Machine-packed cigarettes taxed progressively based on net retail price with thresholds at P5, P6.50, and P10 per pack
- Tax rates for higher priced cigarettes up to P12 per pack
- Variant brands taxed according to highest classification variant
- Tax on brands guaranteed not to be lower than levels as of October 1, 1996, with phased increase if exceeding 70% increase
- Cigarettes packed in twenties only
- Tax rates increased by 12% as of January 1, 2000
- Net retail price classification based on supermarket prices excluding excise and VAT
- Monthly sworn statements of sales volume required from manufacturers/importers; misdeclaration penalties include permit withdrawal and treble fines
- Criminal liabilities under Section 253 of the Code with deportation for non-citizens
Implementation Schedule and Stamps
- New tax rates effective from January 1, 1997
- Mandatory use of internal revenue stamps on cigar and cigarette packs
- Tax and duty-free excisable articles to be marked accordingly by the Secretary of Finance
Annexes and Brand Classification
- Specific brand classifications adopted and made integral part of the Act:
- Annex A for distilled spirits
- Annex B for wines
- Annex C for fermented liquor
- Annex D for cigarettes
Allocation of Incremental Revenue from Tobacco Excise Tax
- 15% of incremental revenue allocated to tobacco producing provinces based on production volume
- Funds designated for cooperative projects, livelihood, alternative farming systems, and agro-industrial projects
- Department of Budget and Management to issue implementing rules in consultation with Oversight Committee
Oversight Committee
- Composed of Chairmen and members from Senate and House of Representatives Committees on Ways and Means
- Responsible for monitoring and ensuring proper implementation of the Act
Rulemaking and Severability
- Secretary of Finance empowered to promulgate implementing rules upon recommendation of the Commissioner of Internal Revenue
- Provision for severability ensures remaining provisions remain effective if any part declared invalid
Repealing Clause
- Laws, decrees, rules, executive orders inconsistent with the Act are repealed, amended or modified accordingly
Effectivity
- The Act took effect on January 1, 1997