Excise Tax

Nature of Excise Tax

Exciseable Goods 1. Those manufactured or produced in the Philippines for: a. domestic sale or b. consumption or c. for any other disposition and 2. Imported items It is imposed in addition to VAT

Kinds of Excise Tax

A. SPECIFIC TAX based on weight or volume or any other physical unit of measurement AD VALOREM TAX based on selling price or other specified value of the good.

B.

Articles Subject to Excise Tax

1.

ALCOHOL - refers to distilled spirits, wines and fermented liquors a. DISTILLED SPIRITS - includes ethyl alcohol, ethanol or spirits of wine, whisky, brandy, rum, gin and vodka, and other similar products or mixtures b. WINES - includes sparkling wines, champagne and other wines of varying proof and alcohol content c. FERMENTED LIQUORS- includes beer, lager beer, ale, porter and other fermented liquors except tuba, basi, tapuy and similar fermented liquors

Articles Subject to Excise Tax (continued)

2.

TOBACCO PRODUCTS a. TOBACCO PRODUCTS - includes tobacco twisted by hand or prepared in any manner for consumption, fine-cut shorts and refuse, scraps, clippings, cuttings, stems and sweepings of tobacco, and tobacco specially prepared for chewing so as to be unsuitable for use in any other manner b. CIGARS mean all rolls of tobacco or any substitute thereof,, wrapped in leaf tobacco c. CIGARETTES mean all rolls of finely-cut leaf tobacco, or any substitute therefore, wrapped in any other material

Articles Subject to Excise Tax (continued)

3.

PETROLEUM refers to MANUFACTURED OILS, including lubricating oils and greases, processed gas, waxes and petrolatum, denatured alcohol to be used for motive power, Naphtha, and other kinds of gasoline and fuels MISCELLANEOUS ARTICLES a. AUTOMOBILES b. NON ESSENTIAL GOODS i. Jewelry ii. Perfumes and toilet waters iii. Yachts and other vessels intended for pleasure and sports

4.

Articles Subject to Excise Tax (continued)

5.
a.

MINERAL PRODUCTS
MINERALS - all naturally occurring inorganic substances (found in nature) whether in solid, liquid, gaseous or any intermediate state MINERAL PRODUCTS - things produced and prepared in a marketable state by simple treatment processes such as washing or drying, but without undergoing any chemical change or process or manufacturing QUARRY RESOURCES - includes marl, marble, granite, volcanic cinders, basalt, tuff and rock phosphate provided that contain no metal or metals or other valuable minerals in economically workable quantities

b.

c.

Rate and Base of Tax

Type of Good
1. ALCOHOL a. b. c. Distilled Spirits Wines Fermented Liquors Per Liter Proof Liter From a minimum of P 8.27 to a maximum of P 504.00 depending on nature and net retail price Specific Tax

Tax Base

Tax Rate

Kind of Tax

2. TOBACCO PRODUCTS a. b. Tobacco Cigars Per Kilo Per cigar P 0.79 for chewing tobacco and P 1.00 for the other kinds of tobacco A minimum of a straight rate of 10% to a maximum of a fixed amount of P 50.000 plus 15%in excess of P 500.00 depending on the net retail price From P 2.72 to P 28.30 depending on the net retail price Specific tax

c.

Cigarettes

Per pack

Rate and Base of Tax (continued)

Type of Good
3. PETROLEUM a. Lubricating Oils/Greases b. Other kinds of fuels Per Liter or Kg P 4.50

Tax Base

Tax Rate

Kind of Tax

Per Liter

For kerosene, diesel fuel oil, and liquefied petroleum gas P 0.00 to P 5.35 depending on the kind of fuel and per liter of volume capacity P 0.56

Specific tax

c.

Asphalts

Per kg

Rate and Base of Tax (continued)

Type of Good
4. MINERAL PRODUCTS a. b. Coal and Coke Indigenous Petroleum Per metric ton Fair international price on the 1st taxable sale, barter, exchange before removal from the place of production Actual market value of gross output at the time of removal P 10.00 Specific tax

Tax Base

Tax Rate

Kind of Tax

3%

Ad valorem tax

c.

Other Kinds of Minerals

2%

Rate and Base of Tax (continued)

Type of Good Tax Base Tax Rate Kind of Tax

5. MISCELLANEOUS ARTICLES a. Automobiles Manufacturers or importers selling price* A minimum of a straight rate of 2% to a maximum of a fixed amount of P 512,000.00 plus 60% depending on the manufacturer or importers selling price 20% of the wholesale price the value of importation used by the BOC in determining tariff and customs duties, net of excise tax and VAT

Ad valorem Tax

b.

Non essential products

Whole sale price or value of importation*

* Note : Manufacturer's or Importers Selling Price* excludes VAT and Excise Tax

Persons Liable to File and Pay

Persons Liable to File and Pay Excise Tax on Domestic Products
v

General Rule: Liability rests on the manufacturer or producer before removal of domestic products from the place of production Specific Rules
Articles Subject to Excise Tax Indigenous petroleum, natural gas or liquefied natural gas Exported products Persons Liable to File and Pay First buyer, purchaser or transferee for local sale, barter or transfer Owner, lessee, concessionaire or operator of the mining claim, whichever is applicable Owner or person having possession of the product

Where domestic products are removed from the place of production without the payment of the tax

Persons Liable to File and Pay (continued)

Persons Liable to File and Pay Excise Tax on Imported Articles
Articles Subject to Excise Tax Imported articles, generally In case of tax-free articles imported into the Philippines by persons, entities, or agencies exempt from tax which are subsequently sold, transferred or exchanged in the Philippines to non-exempt persons or entities Persons Liable to File and Pay Owner or importer, or by the person who is found in possession of articles The purchasers or recipients shall be considered the importers, liable to pay the tax

Importation for Duty-Free Shops

Specific Rules

importation of cigars and cigarettes, distilled spirits and wines, even if destined for tax and duty free shops, are subject to excise taxes articles directly imported by a government-owned and operated dutyfree shop, should be labeled 'duty-free' and 'not for resale goods which are not labeled as required, as well as tax and duty-free articles obtained from a duty-free shop and subsequently found in a non-duty-free shop for resale shall be confiscated, and the perpetrator shall be punished according to law the removal and transfer of tax and duty-free goods, other than cigars and cigarettes, distilled spirits, fermented liquors and wines, from one freeport to another freeport, is not an introduction into the Philippine customs territory

Time of Filing and Payments

v

General Rule: Tax should be paid by the manufacturer or producer before removal of domestic products from the place of production Specific Rules
Articles Subject to Excise Tax Locally manufactured petroleum products and indigenous petroleum Nonmetallic mineral or mineral products, or quarry resources Locally produced or extracted metallic mineral or mineral products Imported mineral or mineral products (metallic or nonmetallic) Time of Filing and Payment Before removal from the place of production of products Upon removal of such products from the locality where mined or extracted Within 15 days after the end of the calendar quarter when such products were removed from the place of production Before their removal from customs custody

Exemptions from Excise Tax

1.

2. 3. 4.

Petroleum products sold to international carriers and exempt entities or agencies Domestic denatured alcohol Damaged liquors Conditional tax-free removal of certain excisable articles Spirits requiring rectification Transfer of fermented liquors to bonded warehouse Tobacco unfit for chewing or smoking

Credit for Excise Tax

When goods locally produced or manufactured are removed and actually exported without returning to the Philippines, whether in their original state or as ingredients or parts of any manufactured goods or products, any excise tax paid shall be credited or refunded upon submission of the proof of actual exportation and upon receipt of the corresponding foreign exchange payment The excise tax on mineral products (except coal and coke) shall not be creditable or refundable even if the mineral products are actually exported.