Revised Excise Tax Guidelines on Alcohol and Tobacco

"Act": Republic Act No. 10351.
"Carbonated Wine": Effervescent wine with >0.392 g CO2 per 100 ml.
"Cigarettes Packed by Hand": Cigarettes packaged manually, not mechanically.
"Compounded Liquors": Mixtures of distilled spirits with colorings, flavorings, or other ingredients.
"Net Retail Price (NRP)": Retail price in key supermarkets excluding excise and VAT.
"Sparkling Wine or Champagne": Wine with >0.392 g CO2 per 100 ml from secondary fermentation.
"Still Wine": Wine with ≤0.392 g CO2 per 100 ml.
"Suggested Net Retail Price": Price intended for retail sale by manufacturer/importer.

Excise tax levied on alcohol and tobacco as per schedules.
Distilled spirits: 15%-20% ad valorem based on NRP per proof plus specific tax per proof liter starting at Php20.00, increasing 4% annually from 2016.
Wines: Tax rates vary on sparkling, still, carbonated, and fortified wines, with yearly 4% increases from 2014.
Illustrative examples demonstrate excise computation for distilled spirits and cigars.

New products classified based on suggested NRP declared in sworn statement.
Existing products reclassified if re-introduced post-Act.
Classifications reviewed every two years.
Products are taxed distinctly based on brand name, label design, packaging, and container size.

Manufacturers/importers must submit notarized sworn statements detailing brand, specifications, wholesale and retail prices (net of VAT and excise), cost breakdowns, tax rates, and tax computations.
Statements submitted upon initial registration and updated semi-annually or upon cost or price changes prior to product removal from production.
For imports, cost of importation must comply with customs valuation standards.
Sworn statements are subject to BIR verification; inaccuracies require revisions and may incur penalties.

Understatement ≥15% of actual NRP triggers additional excise tax and penalties.
Illustrative example demonstrates computation of deficiency tax, interest, and penalties.

Importations to duty-free shops, Duty Free Philippines, economic zones, or freeport zones are subject to excise tax.
Imported products with distinguishing features from locally sold goods treated as new products subject to classification and validation.

Exported tobacco products require posting of an export bond equal to domestic excise tax liability.
Tobacco imports intended for foreign countries require bonds equivalent to customs duties, excise, and VAT.

Cigarettes must be packed in twenties or combinations not exceeding 20 sticks.
Tax rates imposed based on net retail price of each package, including smaller packs (e.g., 5s, 10s).

Existing products as of Act’s effectivity classified based on the 2010 BIR price survey.
Prohibition on downward reclassification applies.
Stocktaking to determine applicable tax rates on products in inventory at effectivity.
No tax credit/refund for specific tax paid on ethyl alcohol inventory used in compounded liquors.

Violations subject to penalties under Title X of the NIRC.
Misdeclaration or misrepresentation in sworn statements may lead to summary cancellation of permits.
Corporations face fines tripling deficiency taxes, surcharges, and interest.
Criminal liability applies for offenses; foreign offenders may be deported post sentence.

Regulations effective upon publication in leading newspapers of general circulation.