PART 6 - EXCISE TAXES ON CERTAIN GOODS by the owner, lessee, concessionaire or operator of the mining

claim.
CHAPTER I

GENERAL PROVISIONS
Should domestic products be removed from the place of
production without the payment of the tax, the owner or person
SEC.129. Goods and Services Subject to Excise Taxes. - Excise having possession thereof shall be liable for the tax due thereon.
taxes apply to goods manufactured or produced in the Philippines
for domestic sales or consumption or for any other disposition
and to things imported as well as services performed in the (2) Time for Filing of Return and Payment of the Tax. - Unless
Philippines.[127] The excise tax imposed herein shall be in otherwise specifically allowed, the return shall be filed and the
addition to the value-added tax imposed under Title IV. excise tax paid by the manufacturer or producer before removal
of domestic products from place of production: Provided, That the
excise tax on locally manufactured petroleum products and
For purposes of this Title, excise taxes herein imposed and based indigenous petroleum levied under Sections 148 and 151(A)(4),
on weight or volume capacity or any other physical unit of respectively, of this Title shall be paid within ten (10) days from
measurement shall be referred to as 'specific tax' and an excise the date of removal of such products for the period from January
tax herein imposed and based on selling price or other specified 1, 1998 to June 30, 1998; within five (5) days from the date of
value of the good or service performed [127] shall be referred to removal of such products for the period from July 1, 1998 to
as 'ad valorem tax.' December 31, 1998; and, before removal from the place of
production of such products from January 1, 1999 and thereafter:
Provided, further, That the excise tax on nonmetallic mineral or
mineral products, or quarry resources shall be due and payable
SEC. 130. Filing of Return and Payment of Excise Tax on Domestic
upon removal of such products from the locality where mined or
Products. –
extracted, but with respect to the excise tax on locally produced
or extracted metallic mineral or mineral products, the person
liable shall file a return and pay the tax within fifteen (15) days
(A) Persons Liable to File a Return, Filing of Return on Removal after the end of the calendar quarter when such products were
and Payment of Tax. - removed subject to such conditions as may be prescribed by
rules and regulations to be promulgated by the Secretary of
Finance, upon recommendation of the Commissioner. For this
(1) Persons Liable to File a Return.- Every person liable to pay purpose, the taxpayer shall file a bond in an amount which
excise tax imposed under this Title shall file a separate return for approximates the amount of excise tax due on the removals for
each place of production setting forth, among others the the said quarter. The foregoing rules notwithstanding, for
description and quantity or volume of products to be removed, imported mineral or mineral products, whether metallic or
the applicable tax base and the amount of tax due thereon: nonmetallic, the excise tax due thereon shall be paid before their
Provided, however, That in the case of indigenous petroleum, removal from customs custody.
natural gas or liquefied natural gas, the excise tax shall be paid
by the first buyer, purchaser or transferee for local sale, barter or
transfer, while the excise tax on exported products shall be paid
(3) Place of Filing of Return and Payment of the Tax. - Except as he has an interest, the wholesale price in such establishment
the Commissioner otherwise permits, the return shall be filed with shall constitute the gross selling price. Should such price be less
and the tax paid to any authorized agent bank or Revenue than the cost of manufacture plus expenses incurred until the
Collection Officer, or duly authorized City or Municipal Treasurer goods are finally sold, then a proportionate margin of profit, not
in the Philippines. less than ten percent (10%) of such manufacturing cost and
expenses, shall be added to constitute the gross selling price.

(4) Exceptions. - The Secretary of Finance, upon recommendation

of the Commissioner may, by rules and regulations, prescribe: (C) Manufacturer's or Producer's Sworn Statement. - Every
manufacturer or producer of goods or products subject to excise
taxes shall file with the Commissioner on the date or dates
(a) The time for filing the return at intervals other than the time designated by the latter, and as often as may be required, a
prescribed in the preceding paragraphs for a particular class or sworn statement showing, among other information, the different
classes of taxpayers after considering factors such as volume of goods or products manufactured or produced and their
removals, adequate measures of security and such other relevant corresponding gross selling price or market value, together with
information required to be submitted under the pertinent the cost of manufacture or production plus expenses incurred or
provisions of this Code; and to be incurred until the goods or products are finally sold.

(b) The manner and time of payment of excise taxes other than (D) Credit for Excise tax on Goods Actually Exported. - When
as herein prescribed, under a tax prepayment, advance deposit goods locally produced or manufactured are removed and
or similar schemes. In the case of locally produced of extracted actually exported without returning to the Philippines, whether so
minerals and mineral products or quarry resources where the exported in their original state or as ingredients or parts of any
mine site or place of extraction is not the same as the place of manufactured goods or products, any excise tax paid thereon
processing or production, the return shall be filed with and the shall be credited or refunded upon submission of the proof of
tax paid to the Revenue District Office having jurisdiction over the actual exportation and upon receipt of the corresponding foreign
locality where the same are mined, extracted or quarried: exchange payment: Provided, That the excise tax on mineral
Provided, however, That for metallic minerals processed abroad, products, except coal and coke, imposed under Section 151 shall
the return shall be filed and the tax due thereon paid to the not be creditable or refundable even if the mineral products are
Revenue District Office having jurisdiction over the locality where actually exported.
the same are mined, extracted or quarried.

SEC. 131. Payment of Excise Taxes on Imported Articles. –

(B) Determination of Gross Selling Price of Goods Subject to Ad
Valorem Tax. - Unless otherwise provided, the price, excluding
the value-added tax, at which the goods are sold at wholesale in (A) Persons Liable. - Excise taxes on imported articles shall be
the place of production or through their sales agents to the public paid by the owner or importer to the Custom Officers,
shall constitute the gross selling price. If the manufacturer also conformably with the regulations of the Department of Finance
sells or allows such goods to be sold at wholesale in another and before the release of such articles from the customs house,
establishment of which he is the owner or in the profits of which or by the person who is found in possession of articles which are
exempt from excise taxes other than those legally entitled to
exemption.
Cigars and cigarettes, distilled spirits and wines within the
premises of all duty-free shops which are not labeled as herein
above required, as well as tax and duty-free articles obtained
In the case of tax-free articles brought or imported into the from a duty free shop and subsequently found in a non duty-free
Philippines by persons, entities, or agencies exempt from tax shop to be offered for resale shall be confiscated, and the
which are subsequently sold, transferred or exchanged in the perpetrator of such non-labeling or re-selling shall be punishable
Philippines to non-exempt persons or entitles, the purchasers or under the applicable provisions of this Code.
recipients shall be considered the importers thereof, and shall be
liable for the duty and internal revenue tax due on such
importation.
Articles confiscated shall de destroyed using the most
environmentally friendly method available in accordance with the
rules and regulations to be promulgated by the Secretary of
The provision of any special or general law to the contrary Finance, upon recommendation of the Commissioners of Customs
notwithstanding, the importation of cigars and cigarettes, distilled and Internal Revenue.
spirits, fermented liquors and wines into the Philippines, even if
destined for tax and duty free shops, shall be subject to all
applicable taxes, duties, charges, including excise taxes due
thereon. This shall apply to cigars and cigarettes, distilled spirits, The tax due on any such goods, products, machinery, equipment
fermented liquors and wines brought directly into the duly or other similar articles shall constitute a lien on the article itself,
chartered or legislated freeports of the Subic Special Economic and such lien shall be superior to all other charges or liens,
and Freeport Zone, created under Republic Act No. 7227; the irrespective of the possessor thereof.
Cagayan Special Economic Zone and Freeport, created under
Republic Act No. 7922; and the Zamboanga City Special
Economic Zone, created under Republic Act No. 7903,and such (B) Rate and Basis of the Excise Tax on Imported Articles. - Unless
other freeports as may hereafter be established or created by otherwise specified imported articles shall be subject to the same
law: Provided, further, That nothwithstanding the provisions of rates and basis of excise taxes applicable to locally manufactured
Republic Act Nos. 9400 and 9593, importations of cigars and articles.
cigarettes, distilled spirits, fermented liquors and wines made
directly by a government-owned and operated duty-free shop,
like the Duty-Free Philippines (DFP), shall be exempted from all SEC. 132. Mode of Computing Contents of Cask or Package. -
applicable duties only: Provided, still further, That such articles Every fractional part of a proof liter equal to or greater than a half
directly imported by a government-owned and operated duty-free liter in a cask or package containing more than one liter shall be
shop like the Duty-Free Philippines, shall be labeled ‘duty-free’ taxed as a liter, and any smaller fractional part shall be exempt;
and ‘not for resale’: Provided, finally, That the removal and but any package of spirits, the total content of which are less
transfer of tax and duty-free goods, products, machinery, than a proof liter, shall be taxed as one liter.
equipment and other similar articles other than cigars and
cigarettes, distilled spirits, fermented liquors and wines, from one
freeport to another freeport, shall not be deemed an introduction
into the Philippine customs territory. [89]
CHAPTER II (a) International carriers of Philippine or foreign registry on their
use or consumption outside the Philippines: Provided, That the
petroleum products sold to these international carriers shall be
EXEMPTION OR CONDITIONAL TAX-FREE REMOVAL OF CERTAIN stored in a bonded storage tank and may be disposed of only in
ARTICLES accordance with the rules and regulations to be prescribed by the
Secretary of Finance, upon recommendation of the
Commissioner;
SEC. 133. Removal of Wines and distilled Spirits for Treatment of
Tobacco Leaf.- Upon issuance of a permit from the Commissioner
and subject to the rules and regulations prescribed by the (b) Exempt entities or agencies covered by tax treaties,
Secretary of Finance, manufacturers of cigars and cigarettes may conventions and other international agreements for their use of
withdraw from bond, free of excise local and imported wines and consumption: Provided, however, That the country of said foreign
distilled spirits in specific quantities and grades for use in the international carrier or exempt entities or agencies exempts from
treatment of tobacco leaf to be used in the manufacture of cigars similar taxes petroleum products sold to Philippine carriers,
and cigarettes; but such wines and distilled spirits must first be entities or agencies; and
suitably denatured.

(c) Entities which are by law exempt from direct and indirect
SEC. 134. Domestic Denatured Alcohol. - Domestic alcohol of not taxes.
less than one hundred eighty degrees (180O) proof (ninety
percent (90%) absolute alcohol) shall, when suitably denatured
and rendered unfit for oral intake, be exempt from the excise tax SEC. 136. Denaturation, Withdrawal and Use of Denatured
prescribed in Section 141: Provided, however, That such Alcohol. - Any person who produces, withdraws, sells, transports
denatured alcohol shall be subject to tax under Section 106(A) of or knowingly uses, or is in possession of denatured alcohol, or
this Code: Provided, further, That if such alcohol is to be used for articles containing denatured alcohol in violation of laws or
motive power, it shall be taxed under Section 148(d) of this Code: regulations now or hereafter in force pertaining thereto shall be
Provided, finally, That any alcohol, previously rendered unfit for required to pay the corresponding tax, in addition to the penalties
oral intake after denaturing but subsequently rendered fit or oral provided for under Title X of this Code.
intake after undergoing fermentation, dilution, purification,
mixture or any other similar process shall be taxed under Section
141 of this Code and such tax shall be paid by the person in SEC. 137. Removal of Spirits Under Bond for Rectification.- Spirits
possession of such reprocessed spirits. requiring rectification may be removed from the place of
production to another establishment for the purpose of
rectification without prepayment of the excise tax: Provided, That
SEC. 135. Petroleum Products Sold to International Carriers and the distiller removing such spirits and the rectifier receiving them
Exempt Entities or Agencies. - Petroleum products sold to the shall file with the Commissioner their joint bond conditioned upon
following are exempt from excise tax: the payment by the rectifier of the excise tax due on the rectified
alcohol: Provided, further, That in cases where alcohol has
already been rectified either by original and continuous regulations prescribed by the Secretary of Finance. Stemmed leaf
distillation or by re-distillation, no loss for rectification and tobacco, fine-cut shorts, the refuse of fine-cut chewing tobacco,
handling shall be allowed and the rectifier thereof shall pay the scraps, cuttings, clippings, stems, or midribs, and sweepings of
excise tax due on such losses: Provided, finally, That where a tobacco may be sold in bulk as raw material by one manufacturer
rectifier makes use of spirits upon which the excise tax has not directly to another without payment of the tax, under such
been paid, he shall be liable for the payment of the tax otherwise conditions as may be prescribed in the rules and regulations
due thereon. prescribed by the Secretary of Finance.

SEC. 138. Removal of Fermented Liquors to Bonded Warehouse. - 'Stemmed leaf tobacco,' as herein used, means leaf tobacco
Any brewer may remove or transport from his brewery or other which has had the stem or midrib removed. The term does not
place of manufacture to a bonded warehouse used by him include broken leaf tobacco.
exclusively for the storage or sale in bulk of fermented liquors of
his own manufacture, any quantity of such fermented liquors, not
less than one thousand (1,000) liters at one removal, without
prepayment of the tax thereon under a permit which shall be
granted by the Commissioner. Such permit shall be affixed to
every package so removed and shall be cancelled or destroyed in
CHAPTER III
such manner as the Commissioner may prescribe. Thereafter, the
manufacturer of such fermented liquors shall pay the tax in the
same manner and under the same penalty and liability as when
paid at the brewery. EXCISE TAX ON ALCOHOL PRODUCTS

SEC. 139. Removal of Damaged Liquors Free of Tax. - When any SEC. 141. Distilled Spirits. - [36] On distilled spirits, subject to the
fermented liquor has become sour or otherwise damaged so as to provisions of Section 133 of this Code, an excise tax shall be
be unfit for use as such, brewers may sell and after securing a levied, assessed and collected based on the following schedules:
special permit from the Commissioner, under such conditions as
may be prescribed in the rules and regulations prescribed by the
Secretary of Finance, remove the same without the payment of (A) Effective January 1, 2020
tax thereon in cask or other packages, distinct from those
ordinarily used for fermented liquors, each containing not less
than one hundred seventy-five (175) liters with a note of their (1) An ad valorem tax equivalent to twenty-two percent (22%) of
contents permanently affixed thereon. the net retail price (excluding the excise tax and the value-added
tax) per proof; and

SEC. 140. Removal of Tobacco Products without Prepayment of

Tax. - Products of tobacco entirely unfit for chewing or smoking (2) In addition to the ad valorem tax herein imposed, a specific
may be removed free of tax for agricultural or industrial use, tax of Forty-two pesos (P42.00) per proof liter.
under such conditions as may be prescribed in the rules and
(B) Effective January 1, 2021 (1) An ad valorem equivalent to twenty-two percent (22%) of the
net retail price (excluding the excise tax and the value-added
tax) per proof; and
(1) An ad valorem equivalent to twenty-two percent (22%) of the
net retail price (excluding the excise tax and the value-added
tax) per proof; and (2) In addition to the ad valorem tax herein imposed, the specific
tax of Sixty-six pesos (P66.00) per proof liter.

(2) In addition to the ad valorem tax herein imposed, the specific

tax of Forty-seven pesos (P47.00) per proof liter. (F) In addition to the ad valorem tax herein imposed, the specific
tax imposed under this Section shall be increased by six percent
(6%) every year thereafter, effective January 1, 2025, through
(C) Effective January 1, 2022 revenue regulations to be issued by the Secretary of Finance.

(1) An ad valorem equivalent to twenty-two percent (22%) of the Medicinal preparations, flavoring extracts, and all other
net retail price (excluding the excise tax and the value-added preparations, except toilet preparations, of which, excluding
tax) per proof; and water, distilled spirits form the chief ingredient, shall be subject
to the same tax as such chief ingredient.

(2) In addition to the ad valorem tax herein imposed, the specific

tax of Fifty-two pesos (P52.00) per proof liter. This tax shall be proportionally increased for any strength of the
spirits taxed over proof spirits, and the tax shall attach to this
substance as soon as it is in existence as such, whether it be
subsequently separated as pure or impure spirits, or transformed
(D) Effective January 1, 2023
into any other substance either in the process of original
production or by any subsequent process.

(1) An ad valorem equivalent to twenty-two percent (22%) of the

net retail price (excluding the excise tax and the value-added
'Spirits or distilled spirits' is the substance known as ethyl alcohol,
tax) per proof; and
ethanol or spirits of wine, including all dilutions, purifications and
mixtures thereof, from whatever source, by whatever process
produced, and shall include whisky, brandy, rum, gin and vodka,
(2) In addition to the ad valorem tax herein imposed, the specific and other similar products or mixtures.
tax of Fifty-nine pesos (P59.00) per proof liter.

'Proof spirits' is liquor containing one-half (1/2) of its volume of

(E) Effective January 1, 2024 alcohol of a specific gravity of seven thousand nine hundred and
thirty-nine thousandths (0.7939) at fifteen degrees centigrade
(15˚C). A 'proof liter' means a liter of proof spirits.
Understatement of the suggested net retail price by as much as
fifteen percent (15%) of the actual net retail price shall render
the manufacturer or importer liable for additional excise tax
‘Net retail price’ shall mean the price at which the distilled spirit equivalent to the tax due and difference between the understated
is sold on retail in at least five (5) major supermarkets in Metro suggested net retail price and the actual net retail price.
Manila, excluding the amount intended to cover the applicable
excise tax and the value-added tax. For distilled spirits which are
marketed outside Metro Manila, the ‘net retail price’ shall mean
the price at which the distilled spirits is sold in at least five (5) Distilled spirits introduced in the domestic market after the
major supermarkets in the region excluding the amount intended effectivity of this Act shall be initially taxed according to their
to cover the applicable excise tax and the value-added tax. This suggested net retail prices.
shall initially be validated by the Bureau of Internal Revenue
through a price survey.
‘Suggested net retail price’ shall mean the net retail price
(excluding the excise tax and the value-added tax) at which
Major supermarkets , as contemplated under this Act, shall be locally manufactured or imported distilled spirits are intended by
those with the highest annual gross sales in Metro Manila or the the manufacturer or importer to be sold on retail in major
region, as the case may be, as determined by the Bureau of supermarkets or retail outlets in Metro Manila for those marketed
Internal Revenue, and shall exclude retail outlets or kiosks, nationwide, and in other regions, for those with regional markets.
convenience or sari-sari stores, and others of a similar nature: At the end of three (3) months from the product launch, the
Provided, That no two (2) supermarkets in the list to be surveyed Bureau of Internal Revenue shall validate the suggested net retail
are affiliated and/or branches of each other: Provided, finally, price of the new brand against the net retail price as defined
That in case a particular distilled spirit is not sold in major herein and initially determine the correct tax on a newly
supermarkets, the price survey can be conducted in retail outlets introduced distilled spirits. After the end of nine (9) months from
where said distilled spirit is sold in Metro Manila or the region, as such validation, the Bureau of Internal Revenue shall revalidate
the case maybe, upon determination of the Commissioner of the the initially validated net retail price against the net retail price
Internal Revenue. as of the time of revalidation in order to finally determine the
correct tax on a newly introduced distilled spirits.

The net retail price shall be determined by the Bureau of Internal

Revenue (BIR) through a biannual price survey under oath. All distilled spirits existing in the market at the time of the
effectivity of this Act shall be taxed according to the tax rates
provided above based on the latest price survey of the distilled
spirits conducted by the Bureau
The methodology and all pertinent documents used in the
conduct of the latest price survey shall be submitted to the
Congressional Oversight Committee on the Comprehensive Tax
Reform Program (COCCTRP) created under Republic Act No. of Internal Revenue.
8240.
The methodology and all pertinent documents used in the
conduct of the latest price survey shall be submitted to the
Congressional Oversight Committee on the Comprehensive Tax SEC. 142. Wines. - [36] On wines, there shall be levied, assessed
Reform Program created under Republic Act No. 8240. and collected effective on January 1, 2020, an excise tax
equivalent to Fifty pesos (P50.00) per liter. The rate of tax
imposed under this Section shall be increased by six percent (6%)
every year thereafter, effective January 1, 2021, through revenue
Manufacturers and importers of distilled spirits shall, within thirty regulations issued by the Secretary of Finance.
(30) days from the effectivity of this Act, and within the first five
(5) days of every third month thereafter, submit to the
Commissioner a sworn statement of the volume of sales and
removals for each particular brand of distilled spirits sold at his Manufacturers and importers of wines shall, within thirty (30)
establishment for the three-month period immediately preceding. days from the effectivity of this Act, and within the first five (5)
days of every month thereafter, submit to the Commissioner a
sworn statement of the volume of sales and removals for each
particular brand of wines sold at his establishment for the three-
Any manufacturer or importer who, in violation of this Section, month period immediately preceding.
misdeclares or misrepresents in his or its sworn statement herein
required any pertinent data or information shall, upon final
findings by the Commissioner that the violation was committed,
be penalized by a summary cancellation or withdrawal of his or Any manufacturer or importer who, in violation of this Section,
its permit to engage in business as manufacturer or importer of misdeclares or misrepresents in his or its sworn statement herein
distilled spirits. required any pertinent data or information shall, upon final
findings by the Commissioner that the violation was committed
be penalized by a summary cancellation or withdrawal of his or
its permit to engage in business as manufacturer or importer of
Any corporation, association or partnership liable for any of the wines.
acts or omissions in violation of this Section shall be fined treble
the amount of deficiency taxes, surcharges and interest which
may be assessed pursuant to this Section.
Any corporation, association or partnership liable for any of the
acts or omissions in violation of this Section shall be fined treble
the amount of deficiency taxes, surcharges and interest which
Any person liable for any of the acts or omissions prohibited may be assessed pursuant to this Section.
under this Section shall be criminally liable and penalized under
Section 254 of this Code. Any person who willfully aids or abets in
the commission of any such act or omission shall be criminally
liable in the same manner as the principal. Any person liable for any of the acts or omissions prohibited
under this Section shall be criminally liable and penalized under
Section 254 of this Code. Any person who willfully aids or abets in
the commission of any such act or omission shall be criminally
If the offender is not a citizen of the Philippines, he shall be liable in the same manner as the principal.
deported immediately after serving the sentence, without further
proceedings for deportation.
If the offender is not a citizen of the Philippines, he shall be
deported immediately after serving the sentence, without further
proceedings for deportation. Every brewer, manufacturer or importer of fermented liquor shall,
within thirty (30) days from the effectivity of this Act, and within
the first five (5) days of every month thereafter, submit to the
Commissioner a sworn statement of the volume of sales and
Sec. 143. Fermented Liquor. - [36] There shall be levied, assessed removals for each particular brand of fermented liquor sold at his
and collected an excise tax on beer, lager beer, ale, porter and establishment for the three-month period immediately preceding.
other fermented liquors regardless if manufactured in factories or
sold and brewed at micro-breweries or small establishments such
as pubs and restaurants, except tuba, basi, tapuy and similar
domestic fermented liquors in accordance with the following Any brewer, manufacturer or importer who, in violation of this
schedule: Section, misdeclares or misrepresents in his or its sworn
statement herein required any pertinent data or information shall,
upon final findings by the Commissioner that the violation was
committed, be penalized by a summary cancellation or
Effective on January 1, 2020, the tax shall be Thirty-five pesos withdrawal of his or its permit to engage in business as brewer,
(P35.00) per liter; manufacturer or importer of fermented liquor.

Effective on January 1, 2021, the tax shall be Thirty-seven pesos Any corporation, association or partnership liable for any of the
(P37.00) per liter; acts or omissions in violation of this Section shall be fined treble
the amount of deficiency taxes, surcharges and interest which
may be assessed pursuant to this Section.
Effective on January 1, 2022, the tax shall be Thirty-nine pesos
(P39.00) per liter;
Any person liable for any of the acts or omissions prohibited
under this Section shall be criminally liable and penalized under
Effective on January 1, 2023, the tax shall be Forty-one pesos Section 254 of this Code. Any person who willfully aids or abets in
(P41.00) per liter; and the commission of any such act or omission shall be criminally
liable in the same manner as the principal.

Effective on January 1, 2024, the tax shall be Forty-three pesos

(P43.00) per liter. If the offender is not a citizen of the Philippines, he shall be
deported immediately after serving the sentence, without further
proceedings for deportation.
The rates of tax imposed under this Section shall be increased by
six percent (6%) every year thereafter effective on January 1,
2025, through revenue regulations issued by the Secretary of
Finance.
CHAPTER IV to be exported or to be used in the manufacture of cigars,
cigarettes, or other tobacco products on which the excise tax will
eventually be paid on the finished product, under such conditions
EXCISE TAX ON TOBACCO PRODUCTS as may be prescribed in the rules and regulations promulgated by
the Secretary of Finance, upon recommendation of the
Commissioner.
SEC. 144. Tobacco Products, Heated Tobacco Products, and Vapor
Products. [36] - There shall be collected an excise tax of One
peso and seventy-five centavos (P1.75) effective on January 1, On tobacco specially prepared for chewing so as to be unsuitable
2013 on each kilogram of the following products of tobacco: for use in any other manner, on each kilogram, One peso and fifty
centavos (P1.50) effective on January 1, 2013.

(A) Tobacco Products. - There shall be collected an excise tax of

One peso and seventy-five centavos (P1.75) effective on January The rates of tax imposed under this Section shall be increased by
1, 2013 on each kilogram of the following products of tobacco: four percent. (4%) every year thereafter effective on January 1,
2014, through revenue regulations issued by the Secretary of
Finance.
(a) Tobacco twisted by hand or reduced into a condition to be
consumed in any manner other than the ordinary mode of drying
and curing; No tobacco products manufactured in the Philippines and
produced for export shall be removed from their place of
manufacture or exported without posting of an export bond
equivalent to the amount of the excise tax due thereon if sold
(b) Tobacco prepared or partially prepared with or without the
domestically: Provided, however, That tobacco products for
use of any machine or instruments or without being pressed or
export may be transferred from the place of manufacture to a
sweetened except as otherwise provided hereunder; and
bonded facility, upon posting of a transfer bond, prior to export.

(c) Fine-cut shorts and refuse, scraps, clippings, cuttings, stems

Tobacco products imported into the Philippines and destined for
and sweepings of tobacco except as otherwise provided
foreign countries shall not be allowed entry without posting a
hereunder.
bond equivalent to the amount of customs duty, excise and
value-added taxes due thereon if sold domestically.

Stemmed leaf tobacco, tobacco prepared or partially prepared

with or without the use of any machine or instrument or without
Manufacturers and importers of tobacco products shall, within
being pressed or sweetened, fine-cut shorts and refuse, scraps,
thirty (30) days from the effectivity of this Act, and within the first
clippings, cuttings, stems, midribs, and sweepings of tobacco
five (5) days of every month thereafter, submit to the
resulting from the handling or stripping of whole leaf tobacco
Commissioner a sworn statement of the volume of sales for each
shall be transferred, disposed of, or otherwise sold, without any
prepayment of the excise tax herein provided for, if the same are
particular brand of tobacco products sold for the three-month
period immediately preceding.
Effective on January 1, 2021, Twenty-seven pesos and fifty
centavos (P27.50) per pack of twenty (20) units or packaging
combinations of not more than twenty (20) units;
Any manufacturer or importer who, in violation of this Section,
misdeclares or misrepresents hi his or its sworn statement herein
required any pertinent data or information shall, upon final
findings by the Commissioner that the violation was committed, Effective on January 1, 2022, Thirty pesos (P30.00) per pack of
be penalized by a summary cancellation or withdrawal of his or twenty (20) units or packaging combinations of not more than
its permit to engage in business as manufacturer or importer of twenty (20) units; and
cigars or cigarettes.

Effective on January 1,2023, Thirty-two pesos and fifty centavos

Any corporation, association or partnership liable for any of the (P32.50) per pack of twenty (20) units or packaging combinations
acts or omissions in violation of this Section shall be fined treble of not more than twenty (20) units.
the amount of deficiency taxes, surcharges and interest which
may be assessed pursuant to this Section.
The rates of tax imposed under this Subsection, shall be
increased by five percent (5%) every year effective on January 1,
Any person liable for any of the acts or omissions prohibited 2024 through revenue regulations issued by the Secretary of
under this Section shall be criminally liable and penalized under Finance.
Section 254 of this Code. Any person who willfully aids or abets in
the commission of any such act or omission shall be criminally
liable in the same manner as the principal. Heated tobacco products shall only be packed in twenties and
other packaging combinations of not more than twenty (20) units.

If the offender is not a citizen of the Philippines, he shall be

deported immediately after serving the sentence, without further No heated tobacco products manufactured in the Philippines and
proceedings for deportation. produced for export shall be removed from their place of
manufacture or exported without posting of an export bond
equivalent to the amount of the excise tax due thereon if sold
(B) Heated Tobacco Products. [36] - There shall be levied, domestically: Provided, however, That heated tobacco products
assessed and collected on heated tobacco products an excise tax for export may be transferred from the place of manufacture to a
at the rate prescribed below: bonded facility, upon posting of a transfer bond, prior to export.

Effective on January 1, 2020, Twenty-five pesos (P25.00) per pack Heated tobacco products imported into the Philippines and
of twenty (20) units or packaging combinations of not more than destined for foreign countries shall not be allowed entry without
twenty (20) units; posting a bond equivalent to the amount of customs duty, excise
and value-added taxes due thereon if sold domestically.
 advertising, and distribution of heated tobacco products,
including banning the sale to nonsmokers or persons below
Manufacturers, distributors, and importers of heated tobacco twenty-one (21) years old.
products shall, within thirty (30) days from the effectivity of this
Act, and within the first five (5) days of every month thereafter,
submit to the Commissioner a sworn statement of the volume of
sales and removals for each particular brand of heated tobacco Selling heated tobacco products to persons below twenty-one
products sold for the three-month period immediately preceding. (21) years old shall he prohibited, and shall be punished with a
fine of Ten thousand pesos (P10,000.00) and imprisonment of
thirty (30) days.

Any manufacturer, distributor, or importer who, in violation of this

Section, misdeclares or misrepresents in his or its sworn
statement herein required any pertinent data or information shall, Unit packets and any outside wrapping of heated tobacco
upon final findings by the Commissioner that the violation was products and other similar products shall carry a health warning
committed, be penalized by a summary cancellation or compliant with Republic Act No. 10643, otherwise known as ‘The
withdrawal of his/her or its permit to engage in business as Graphic Health Warnings Law’.
manufacturer, distributor, or importer of heated tobacco
products.
Manufacturers, distributors, importers, and sellers of heated
tobacco products are given a period of eighteen (18) months
Any corporation, association or partnership liable for any of the from the effectivity of the implementing rules and regulations
acts or omissions in violation of this Section shall be fined treble (IRR) of this Act to comply with the requirements under such IRR.
the amount of deficiency taxes, surcharges and interest which
may be assessed pursuant to this Section.
Eighteen (18) months after the effectivity of this Act, no person or
legal entity shall sell or commercially distribute or display any
Any person liable for any of the acts or omissions prohibited heated tobacco product without ensuring that the labels and
under this Section shall be criminally liable and penalized under packages, as well as any other container used in displaying the
Section 254 of this Code. Any person who willfully aids or abets in said products meet the requirements under this Act.
the commission of any such act or omission shall be criminally
liable in the same manner as the principal.
Any violation of the foregoing provisions on health warnings shall
If the offender is not a citizen of the Philippines, he/she shall be be punishable with the same penalties provided for in Republic
deported immediately after serving the sentence, without further Act No. 10643, otherwise known as ‘The Graphic Health Warnings
proceedings for deportation. Law’.

The Food and Drug Administration (FDA) shall periodically The Bureau of Internal Revenue is mandated to issue a revenue
determine and regulate, consistent with evolving medical and regulation prescribing the floor price or the minimum price of
scientific studies, the manufacture, importation, sale, packaging,
heated tobacco product taking into account the sum of the excise (2) Conventional 'Freebase' or 'Classic' Nicotine. - There shall be
and value- added taxes as provided herein. levied, assessed and collected on any liquid substance,
regardless of nicotine content, including nicotine-free liquid or
any similar product, further classified as conventional 'freebase'
(C) Vapor Products. [36] - There shall be levied, assessed and or 'classic' nicotine an excise tax based on the following
collected on vapor products an excise tax at the rates prescribed schedules:
below:

Effective on January 1, 2020, Forty-five pesos (P45.00) per ten

(1) Nicotine Salt or Salt Nicotine. - There shall be levied, assessed (10) milliliters or a fraction thereof;
and collected on any liquid substance, regardless of nicotine
content, including nicotine-free liquids or any similar product,
further classified as nicotine salt or salt nicotine, an excise tax Effective on January 1, 2021, Fifty pesos (P50.00) per ten (10)
based on the following schedules: milliliters or a fraction thereof;

Effective on January 1, 2020, Thirty-seven pesos (P37.00) per Effective on. January 1, 2022, Fifty-five pesos (P55.00) per ten
milliliter or a fraction thereof; (10) milliliters or a fraction thereof; and

Effective on January 1, 2021, Forty-two pesos (P42.00) per Effective on January 1, 2023, Sixty pesos (P60.00) per ten (10)
milliliter or a fraction thereof; milliliters or a fraction thereof.

Effective on January 1, 2022, Forty-seven pesos (P47.00) per- Provided, That the rates of tax imposed under this Subsection
milliliter or a fraction thereof; and shall be increased by five percent (5%) every year effective
January 1, 2024, through revenue regulations to be issued by the
Secretary of Finance.
Effective on January 1, 2023, Fifty-two pesos (P52.00) per
milliliter or a fraction thereof.
Manufacturers, distributors, and importers of vapor products shall
be required to indicate on the package the actual volume in
Provided, That the rates of tax imposed under this Subsection milliliters of the liquid solutions and gels.
shall be increased by five percent (5%) every year effective on
January 1, 2024, through revenue regulations issued by the
Secretary of Finance. No vapor products manufactured in the Philippines and produced
for export shall be removed from their place of manufacture or
exported without posting of an export bond equivalent to the
amount of the excise tax due thereon if sold domestically:
Provided, however, That vapor products for export may be
transferred from the place of manufacture to a bonded facility,
upon posting of a transfer bond, prior to export. If the offender is not a citizen of the Philippines, he/she shall be
deported immediately after serving the sentence, without further
proceedings for deportation.

Vapor products imported into the Philippines and destined for

foreign countries shall not be allowed entry without posting a
bond equivalent to the amount of customs duty, excise and The FDA shall periodically determine and regulate, consistent
value-added taxes due thereon if sold domestically. with evolving medical and scientific studies, the manufacture,
importation, sale, packaging, advertising, and distribution of
vapor products, including banning the sale to nonsmokers or
persons below twenty-one (21) years old, and banning of
Manufacturers, distributors, and importers of vapor products flavorings.
shall, within thirty (30) days from the effectivity of this Act, and
within the first five (5) days of every month thereafter, submit to
the Commissioner a sworn statement of the volume of sales for
each particular brand of vapor products sold for the three-month Provided, That vapor products which exceed sixty-five milligrams
period immediately preceding. of nicotine per milliliter (65mg/ml) of liquid or gel, or which does
not exceed this limit but seeks to make health claims, shall be
subject to additional requirements as the DOH and the FDA may
impose: Provided, however, That this shall not diminish the
Any manufacturer, distributor, or importer who, in violation of this regulatory powers of the FDA over vapor products, regardless of
Section, misdeclares or misrepresents in his/her or its sworn nicotine content.
statement herein required any pertinent data or information shall,
upon final findings by the Commissioner that the violation was
committed, be penalized by a summary cancellation or
withdrawal of his/her or its permit to engage in business as Selling vapor products to persons below twenty-one (21) years
manufacturer, distributor, or importer of vapor products. old shall be prohibited, and shall be punished with a fine of Ten
thousand pesos (P10,000.00) and imprisonment of (30) days.

Any corporation, association or partnership liable for any of the

acts or omissions in violation of this Section shall be fined treble The manufacture, importation, sale and distribution of vapor
the amount of deficiency taxes, surcharges and interest which products with flavoring other than plain tobacco or plain menthol,
may be assessed pursuant to this Section. shall be prohibited.

Any person liable for any of the acts or omissions prohibited Unit packets and any outside wrapping of vapor products and
under this Section shall be criminally liable and penalized under other similar products shall carry a health warning compliant with
Section 254 of this Code. Any person who willfully aids or abets in Republic Act No. 10643, otherwise known as ‘The Graphic Health
the commission of any such act or omission shall be criminally Warnings Law’.
liable in the same manner as the principal.
Manufacturers, distributors, importers, and sellers of vapor (a) An ad valorem tax equivalent to twenty percent (20%) of the
products are given a period of eighteen (18) months from the net retail price (excluding the excise tax and the value-added
effectivity of the IRR of this Act to comply with the requirements tax) per cigar; and
under such IRR.

(b) In addition to the ad valorem tax herein imposed, a specific

Eighteen (18) months after the effectivity of this Act, no person or tax of Five pesos (P5.00) per cigar.
legal entity shall sell or commercially distribute or display any
vapor product without ensuring that the labels and packages, as
well as any other container used in displaying the said products (2) In addition to the ad valorem tax herein imposed, the specific
meet the requirements under this Act. tax rate of Five pesos (₱5.00) imposed under this Subsection shall
Any violation of the foregoing provisions on health warning shall be increased by five percent (5%) effective on January 1, 2024
be punishable with the same penalties provided for in Republic [129] through revenue regulations issued by the Secretary of
Act No. 10643, otherwise known as ‘The Graphic Health Warnings Finance.
Law’.

‘Net-retail price’ shall mean the price at which the cigar is sold on
Notwithstanding the provisions of this Act on heated tobacco retail in at least five (5) major supermarkets in Metro Manila (for
products and vapor products, this Act acknowledges the need for brands of cigar marketed nationally), excluding the amount
further scientific evidence on the health impact of these products. intended to cover the applicable excise tax and the value-added
tax. For cigars which are marketed only outside Metro Manila, the
‘net retail price’ shall mean the price at which the cigar is sold in
at least five (5) major supermarkets in the region excluding the
The Bureau of Internal Revenue is mandated to issue a revenue amount intended to cover the applicable excise tax and the
regulation prescribing the floor price or the minimum price of value-added tax. This shall be provided by the manufacturer or
vapor products taking into account the sum of the excise tax and importer through a sworn statement and shall be validated by the
value-added tax as provided herein. Bureau of Internal Revenue (BIR) through a price survey.

SEC. 145. Cigars and Cigarettes. - Major supermarkets, as contemplated under this Act, shall be
those with the highest annual gross sales in Metro Manila or the
region, as the case may be, as determined by the BIR, and snail
(A) Cigars. - There shall be levied, assessed and collected on exclude retail outlets or kiosks, convenience or sari-sari stores,
cigars an excise tax in accordance with the following schedule: and others of a similar nature: Provided, That no two (2)
supermarkets in the list to be surveyed are affiliated and/or
branches of each other: Provided, finally, That in case a particular
(1) Effective on January 1, 2013 cigar is not sold in major supermarkets, the price survey can be
conducted in retail outlets where said cigar is sold in Metro Manila
or the region, as the case may be, upon determination of the
Commissioner of Internal Revenue.
 ‘Cigarettes packed by hand’ shall refer to the manner of
packaging of cigarette sticks using an individual person’s hands
The net retail price shall be validated by the BIR through a and not through any other means such as a mechanical device,
biannual price survey under oath. machine or equipment.

The methodology and all pertinent documents used in the (C) Cigarettes Packed by Machine. – There shall be levied,
conduct of the latest price survey shall be submitted to the assessed and collected on cigarettes packed by machine a tax at
Congressional Oversight Committee on the Comprehensive Tax the rates prescribed below:
Reform Program created under Republic Act No. 8240.[130]

Effective on January 1,2020, Forty-five pesos (₱45.00) per pack;

(B) Cigarettes Packed by Hand. - There shall be levied, assessed
and collected on cigarettes packed by hand an excise tax based
on the following schedules:
Effective on January 1, 2021, Fifty pesos (₱50.00) per pack;

Effective on January 1, 2020, Forty-five pesos (₱45.00) per pack;

Effective on January 1. 2022, Fifty-five pesos (₱55.00) per pack;

Effective on January 1, 2021. Fifty pesos (₱50.00) per pack;

Effective on January 1, 2023, Sixty pesos (₱60.00) per pack;[135]

Effective on January 1, 2022, Fifty-five pesos (₱55.00) per pack;

The rates of tax imposed under this Subsection shall be increased
by five percent (5%) [132] every year effective on January 1,
2024,[133] through revenue regulations issued by the Secretary
Effective on January 1, 2023, Sixty pesos (₱60.00) per pack;[131] of Finance.

The rates of tax imposed under this Subsection shall be increased Duly registered cigarettes packed by machine shall only be
by five percent (5%) [132] every year effective on January 1, packed in twenties and other packaging combinations of not
2024,[133] through revenue regulations issued by the Secretary more than twenty (20).
of Finance.

Understatement of the suggested net retail price by as much as

Duly registered cigarettes packed by hand shall only be packed in fifteen percent (15%) of the actual net retail price shall render
twenties and other packaging combinations of not more than the manufacturer or importer liable for additional excise tax
twenty (20).[134] equivalent to the tax due and difference between the understated
suggested net retail price and the actual net retail price.
 Selling of tobacco products at a price lower than the combined
excise and value-added taxes imposed under the law shall be
No tobacco products manufactured in the Philippines and prohibited. The seller of such products shall be punished with a
produced for export shall be removed from their place of fine of not less than ten (10) times the amount of excise plus
manufacture or exported without posting of an export bond value-added taxes due but not less than Two hundred thousand
equivalent to the amount of the excise tax due thereon if sold pesos (₱200:000.00) nor more than Five hundred thousand pesos
domestically: Provided, however, That tobacco products for (500,000.00), and imprisonment of not less than four (4) years
export may be transferred from the place of manufacture to a but not more than six (6) years.
bonded facility, upon posting of a transfer bond, prior to export.

The BIR is mandated to issue a revenue regulation prescribing the

Tobacco products imported into the Philippines and destined for cigarette floor price or the minimum cigarette price taking into
foreign countries shall not be allowed entry without posting a account the sum of the excise and value-added taxes as provided
bond equivalent to the amount of customs duty, excise and herein.
value-added taxes due thereon if sold domestically.

Any person liable for any of the acts or omissions prohibited

Manufacturers and importers of cigars and cigarettes shall, within under this Section shall be criminally liable and penalized under
thirty (30) days from the effectivity of this Act and within the first Section 254 of this Code. Any person who willfully aids or abets in
five (5) days of every month thereafter, submit to the the commission of any such act or omission shall be criminally
Commissioner a sworn statement of the volume of sales and liable in the same manner as the principal.
removals for cigars and/or cigarettes for the three-month period
immediately preceding.

If the offender is not a citizen of the Philippines, he/she shall be

deported immediately after serving the sentence, without further
Any manufacturer or importer who, in violation of this Section, proceedings for deportation.[136]
misdeclares or misrepresents in his/her or its sworn statement
herein required any pertinent data or information shall, upon final
findings by the Commissioner that the violation was committed,
be penalized by a summary cancellation or withdrawal of his/her SEC. 146. Inspection Fee. - For inspection made in accordance
or its permit to engage in business as manufacturer or importer with this Chapter, there shall be collected a fee of Fifty centavos
of cigars or cigarettes. (₱0.50) for each thousand cigars or fraction thereof; Ten centavos
(₱0.10) for each thousand cigarettes or fraction thereof; Ten
centavos (₱0.10) for each thousand unit of heated tobacco
products; One centavo (₱0.01) for each milliliter of liquid used in
Any corporation, association or partnership liable for any of the vapor products;[137] Two centavos (₱0.02) for each kilogram of
acts or omissions in violation of this Section shall be fined treble leaf tobacco or fraction thereof; and Three centavos (₱0.03) for
the aggregate amount of deficiency taxes, surcharges and each kilogram or fraction thereof, of scrap and other
interest which may be assessed pursuant to this Section. manufactured tobacco.
The inspection fee on leaf tobacco, scrap, cigars, cigarettes and (d) 'Retail price' shall mean the amount of money or price which
other tobacco products as defined in Section 147 of this Code an ultimate consumer or end-user pays for cigars or cigarettes
shall be paid by the wholesaler, manufacturer, producer, owner or purchased.
operator of redrying plant, as the case may be, immediately
before removal thereof from the establishment of the wholesaler,
manufacturer, owner or operator of the re-drying plant. In case of (e) ‘Heated tobacco products’ refer to tobacco products that may
imported leaf tobacco and products thereof, the inspection fee be consumed through heating tobacco, either electrically or
shall be paid by the importer before removal from customs' through other means sufficiently to release an aerosol that can be
custody. inhaled, without burning or any combustion of the tobacco.
Heated tobacco products include liquid solutions and gels that
are part of the product and are heated to generate an aerosol.
Fifty percent (50%) of the tobacco inspection fee shall accrue to [138]
the Tobacco Inspection Fund created by Section 12 of Act No.
2613, as amended by Act No. 3179, and fifty percent (50%) shall
accrue to the Cultural Center of the Philippines. (f) ‘Vapor products’ shall mean electronic nicotine and non-
nicotine delivery systems (ENDS/ENNDS), which are combinations
of (i) a liquid solution or gel, that transforms into an aerosol
SEC. 147. Definition of Terms. - When used herein and in without combustion through the employment of a mechanical or
statements or official forms prescribed hereunder, the following electronic heating element, battery or circuit that can be used to
terms shall have the meaning indicated: heat such solution or gel, and includes, but is not limited to (ii) a
cartridge, (iii) a tank, and (iv) the device without a cartridge or
tank. It is commonly known as nicotine salt/salt nicotine, and
(a) 'Cigars' mean all rolls of tobacco or any substitute thereof, conventional “freebase” or “classic” nicotine, and other similar
wrapped in leaf tobacco that are consumed via combustion of the products: Provided, That all vapor products shall be covered by
tobacco.[138] this Act regardless of its nicotine content. [138]

(b) 'Cigarettes' mean all rolls of finely-cut leaf tobacco, or any

substitute therefor, wrapped in paper or in any other material
that are consumed via combustion of the tobacco.[138]
CHAPTER V

(c) 'Wholesale price' shall mean the amount of money or price

paid for cigars or cigarettes purchased for the purpose of resale, EXCISE TAX ON PETROLEUM PRODUCTS
regardless of quantity.

SEC. 148. Manufactured Oils and Other Fuels. - There shall be

collected on refined and manufactured mineral oils and motor
fuels, the following excise taxes which shall attach to the goods
hereunder enumerated as soon as they are in existence as such:
(e) Naphtha, regular gasoline, pyrolysis gasoline [142] and other
similar products of distillation, per liter of volume capacity, Seven
pesos (P7.00): [143] Provided, however, That naphtha and
Effective January 1, 2018 pyrolysis gasoline, [142] when used as a raw material in the
reproduction of petrochemical products or in refining of
petroleum products, [142] or as replacement fuel for natural-gas-
(a) Lubricating oils and greases, including but not limited to, fired-combined cycle power plant in lieu of locally-extracted
basestock for lube oils and greases, high vacuum distillates, natural gas during the non-availability thereof, subject to the
aromatic extracts, and other similar preparations, and additives rules and regulations to be promulgated by the Secretary of
for lubricating oils and greases, whether such additives are Finance,[144] per liter of volume capacity, zero (P0.00): Provided,
petroleum based or not, per liter and kilogram respectively, of further, That the production of petroleum products, whether or
volume capacity or weight, Eight pesos (P8.00): Provided, That not they are classified as products of distillation and for use solely
lubricating oils and greases produced from basestocks and for the production of gasoline shall be exempt from excise tax:
additives on which the excise tax has already been paid shall no [142] Provided, finally, That the by-product including fuel oil,
longer be subject to excise tax: Provided, further, That locally diesel fuel, kerosene, pyrolysis gasoline, liquefied petroleum
produced or imported oils previously taxed as such but are gases and similar oils having more or less the same generating
subsequently reprocessed, re-refined or recycled shall likewise be power, which are produced in the processing of naphtha into
subject to the tax imposed under this Section. [139] petrochemical products shall be subject to the applicable excise
tax specified in this Section, except when such by-products are
transferred to any of the local oil refineries through sale, barter or
(b) Processed gas, per liter of volume capacity, Eight pesos exchange, for the purpose of further processing or blending into
(P8.00);[140] finished products which are subject to excise tax under this
Section;

(c) Waxes and petrolatum, per kilogram, Eight pesos (P8.00);

[141] (f) Unleaded premium gasoline, per liter of volume capacity,
Seven pesos (P7.00);[145]

(d) On denatured alcohol to be used for motive power, per liter of

volume capacity, Eight pesos (P8.00):[140] Provided, That unless (g) Aviation turbo jet fuel, aviation gas,,[142] per liter of volume
otherwise provided by special laws, if the denatured alcohol is capacity, Four pesos (P4.00);[146]
mixed with gasoline, the excise tax on which has already been
paid, only the alcohol content shall be subject to the tax herein
prescribed. For purposes of this Subsection, the removal of (h) Kerosene, per liter of volume capacity, Three pesos (P3.00):
denatured alcohol of not less than one hundred eighty degrees [147] Provided, That kerosene, when used as aviation fuel, shall
(180o) proof (ninety percent (90%) absolute alcohol) shall be be subject to the same tax on aviation turbo jet fuel under the
deemed to have been removed for motive power, unless shown preceding paragraph (g), such tax to be assessed on the user
otherwise; thereof;
 for lubricating oils and greases, whether such additives are
petroleum based or not, per liter and kilogram respectively, of
(i) Diesel fuel oil, and on similar fuel oils having more or less the volume capacity or weight, Nine pesos (P9.00): Provided, That
same generating power, per liter of volume capacity, Two pesos lubricating oils and greases produced from basestocks and
and fifty centavos (P2.50);[147] additives on which the excise tax has already been paid shall no
longer be subject to excise tax: Provided, further, That locally
produced or imported oils previously taxed as such but are
(j) Liquefied petroleum gas, per kilogram, One peso (P1.00):[147] subsequently reprocessed, re-refined or recycled shall likewise be
Provided, That liquefied petroleum gas when used as raw subject to the tax imposed under this Section.
material in the production of petrochemical products, subject to
the rules and regulations to be promulgated by the Secretary of
Finance, shall be taxed zero (P0.00) per kilogram:[142] Provided, (b) Processed gas, per liter of volume capacity, Nine pesos
finally, That liquefied petroleum gas used for motive power shall (P9.00);
be taxed at the equivalent rate as the excise tax on diesel fuel
oil;

(c) Waxes and petrolatum, per kilogram, Nine pesos (P9.00);

(k) Asphalts, per kilogram, Eight pesos (P8.00);[148]

(d) On denatured alcohol to be used for motive power, per liter of

volume capacity, Nine pesos (P9.00): Provided, That unless
(l) Bunker fuel oil, and on similar fuel oils having more or less the otherwise provided by special laws, if the denatured alcohol is
same generating power, per liter of volume capacity, Two pesos mixed with gasoline, the excise tax on which has already been
and fifty centavos (P2.50):[147] Provided, however, That the paid, only the alcohol content shall be subject to the tax herein
excise taxes paid on the purchased basestock (bunker) used in prescribed. For purposes of this Subsection, the removal of
the manufacture of excisable articles and forming part thereof denatured alcohol of not less than one hundred eighty degrees
shall be credited against the excise tax due therefrom;[142] and (180o) proof (ninety percent (90%) absolute alcohol) shall be
deemed to have been removed for motive power, unless shown
otherwise;
(m) Petroleum coke, per metric ton, Two pesos and fifty centavos
(P2.50): Provided, however, That, petroleum coke, when used as
feedstock to any power generating facility, per metric ton, zero (e) Naphtha, regular gasoline, pyrolysis gasoline and other similar
(P0.00).[142] products of distillation, per liter of volume capacity, Nine pesos
(P9.00): Provided, however, That naphtha and pyrolysis gasoline,
when used as a raw material in the reproduction of petrochemical
Effective January 1, 2019[142] products or in refining of petroleum products, or as replacement
fuel for natural-gas-fired-combined cycle power plant in lieu of
locally-extracted natural gas during the non-availability thereof,
(a) Lubricating oils and greases, including but not limited to, subject to the rules and regulations to be promulgated by the
basestock for lube oils and greases, high vacuum distillates, Secretary of Finance, per liter of volume capacity, zero (P0.00):
aromatic extracts, and other similar preparations, and additives Provided, further, That the production of petroleum products,
whether or not they are classified as products of distillation and finally, That liquefied petroleum gas used for motive power shall
for use solely for the production of gasoline shall be exempt from be taxed at the equivalent rate as the excise tax on diesel fuel
excise tax: Provided, finally, That the by-product including fuel oil;
oil, diesel fuel, kerosene, pyrolysis gasoline, liquefied petroleum
gases and similar oils having more or less the same generating
power, which are produced in the processing of naphtha into (k) Asphalts, per kilogram, Nine pesos (P9.00);
petrochemical products shall be subject to the applicable excise
tax specified in this Section, except when such by-products are
transferred to any of the local oil refineries through sale, barter or
(l) Bunker fuel oil, and on similar fuel oils having more or less the
exchange, for the purpose of further processing or blending into
same generating power, per liter of volume capacity, Four pesos
finished products which are subject to excise tax under this
and fifty centavos (P4.50): Provided, however, That the excise
Section;
taxes paid on the purchased basestock (bunker) used in the
manufacture of excisable articles and forming part thereof shall
be credited against the excise tax due therefrom; and
(f) Unleaded premium gasoline, per liter of volume capacity, Nine
pesos (P9.00);
(m) Petroleum coke, per metric ton, Four pesos and fifty centavos
(P4.50): Provided, however, That, petroleum coke, when used as
(g) Aviation turbo jet fuel, aviation gas, per liter of volume feedstock to any power generating facility, per metric ton, zero
capacity, Four pesos (P4.00); (P0.00).

(h) Kerosene, per liter of volume capacity, Four pesos (P4.00): Effective January 1, 2020[149]
Provided, That kerosene, when used as aviation fuel, shall be
subject to the same tax on aviation turbo jet fuel under the
preceding paragraph (g), such tax to be assessed on the user
(a) Lubricating oils and greases, including but not limited to,
thereof;
basestock for lube oils and greases, high vacuum distillates,
aromatic extracts, and other similar preparations, and additives
for lubricating oils and greases, whether such additives are
(i) Diesel fuel oil, and on similar fuel oils having more or less the petroleum based or not, per liter and kilogram respectively, of
same generating power, per liter of volume capacity, Four pesos volume capacity or weight, Ten pesos (P10.00): Provided, That
and fifty centavos (P4.50); lubricating oils and greases produced from basestocks and
additives on which the excise tax has already been paid shall no
longer be subject to excise tax: Provided, further, That locally
(j) Liquefied petroleum gas, per kilogram, Two pesos (P2.00): produced or imported oils previously taxed as such but are
Provided, That liquefied petroleum gas when used as raw subsequently reprocessed, re-refined or recycled shall likewise be
material in the production of petrochemical products, subject to subject to the tax imposed under this Section.
the rules and regulations to be promulgated by the Secretary of
Finance, shall be taxed zero (P0.00) per kilogram: Provided,
(b) Processed gas, per liter of volume capacity, Ten pesos further processing or blending into finished products which are
(P10.00); subject to excise tax under this Section;

(c) Waxes and petrolatum, per kilogram, Ten pesos (P10.00); (f) Unleaded premium gasoline, per liter of volume capacity, Ten
pesos (P10.00);

(d) On denatured alcohol to be used for motive power, per liter of

volume capacity, Ten pesos (P10.00): Provided, That unless (g) Aviation turbo jet fuel, aviation gas, per liter of volume
otherwise provided by special laws, if the denatured alcohol is capacity, Four pesos (P4.00);
mixed with gasoline, the excise tax on which has already been
paid, only the alcohol content shall be subject to the tax herein
prescribed. For purposes of this Subsection, the removal of (h) Kerosene, per liter of volume capacity, Five pesos (P5.00):
denatured alcohol of not less than one hundred eighty degrees Provided, That kerosene, when used as aviation fuel, shall be
(180o) proof (ninety percent (90%) absolute alcohol) shall be subject to the same tax on aviation turbo jet fuel under the
deemed to have been removed for motive power, unless shown preceding paragraph (g), such tax to be assessed on the user
otherwise; thereof;

(e) Naphtha, regular gasoline, pyrolysis gasoline and other similar (i) Diesel fuel oil, and on similar fuel oils having more or less the
products of distillation, per liter of volume capacity, Ten pesos same generating power, per liter of volume capacity, Six pesos
(P10.00): Provided, however, That naphtha and pyrolysis (P6.00);
gasoline, when used as a raw material in the reproduction of
petrochemical products or in refining of petroleum products, or as
replacement fuel for natural-gas-fired-combined cycle power
(j) Liquefied petroleum gas, per kilogram, Three peso (P3.00):
plant in lieu of locally-extracted natural gas during the non-
Provided, That liquefied petroleum gas when used as raw
availability thereof, subject to the rules and regulations to be
material in the production of petrochemical products, subject to
promulgated by the Secretary of Finance, per liter of volume
the rules and regulations to be promulgated by the Secretary of
capacity, zero (P0.00): Provided, further, That the production of
Finance, shall be taxed zero (P0.00) per kilogram: Provided,
petroleum products, whether or not they are classified as
finally, That liquefied petroleum gas used for motive power shall
products of distillation and for use solely for the production of
be taxed at the equivalent rate as the excise tax on diesel fuel
gasoline shall be exempt from excise tax: Provided, finally, That
oil;
the by-product including fuel oil, diesel fuel, kerosene, pyrolysis
gasoline, liquefied petroleum gases and similar oils having more
or less the same generating power, which are produced in the
processing of naphtha into petrochemical products shall be (k) Asphalts, per kilogram, Ten pesos (P10.00);
subject to the applicable excise tax specified in this Section,
except when such by-products are transferred to any of the local
oil refineries through sale, barter or exchange, for the purpose of (l) Bunker fuel oil, and on similar fuel oils having more or less the
same generating power, per liter of volume capacity, Six pesos
(P6.00): Provided, however, That the excise taxes paid on the Finance shall require the use of an official fuel marking or similar
purchased basestock (bunker) used in the manufacture of technology on petroleum products that are refined,
excisable articles and forming part thereof shall be credited manufactured, or imported into the Philippines, and that are
against the excise tax due therefrom; and subject to the payment of taxes and duties, such as but not
limited to, unleaded premium gasoline, kerosene, and diesel fuel
oil after the taxes and duties thereon have been paid. The
(m) Petroleum coke, per metric ton, Six pesos (P6.00): Provided, mandatory marking of all petroleum products shall be in
however, That, petroleum coke, when used as feedstock to any accordance with the following:
power generating facility, per metric ton, zero (P0.00).

(a) Official Markers. – There shall be a list of chemical additives

[150] VETOED BY THE PRESIDENT and corresponding quantitative ratio as identified by the
Secretary of Finance as official fuel markers. The official fuel
markers shall be distinct and, to the greatest degree possible,
impossible to imitate or replicate: Provided, That the official fuel
For the period covering 2018 to 2020, the scheduled increase in
marker must be unique to the Philippines and that its chemical
the excise tax on fuel as imposed in this Section shall be
composition and quantitative ratio must persist for at least three
suspended when the average Dubai crude oil price based on
(3) years from their application or administration to the unmarked
Mean of Platts Singapore (MOPS) for three (3) months prior to the
fuel;
scheduled increase of the month reaches or exceeds Eighty
dollars (USD 80) per barrel.

(b) The person, entity, or taxpayer who owns or enters the

petroleum products into the country, or the person to whom the
Provided, That the Department of Finance shall perform an
petroleum products are consigned shall cause and accommodate
annual review of the implementation of the excise tax on fuel and
the marking of the petroleum products with the official marking
shall, based on projections provided and recommendations of the
agent;
Development budget coordination Committee, as reconciled from
the conditions as provided above, recommend the
implementation or suspension of the excise tax on fuel: Provided,
further, That the recommendation shall be given on a yearly (c) Internal revenue or customs officers shall be on site to
basis: Provided, finally, That any suspension of the increase in administer the declaration of the tax and duties imposed on the
excise tax shall not result in any reduction of the excise tax being petroleum products and commence to the application of the fuel
imposed at the time of the suspension.[142] marking.

SEC. 148-A. Mandatory Marking of ALL Petroleum Products. [4] – (d) Absences of Official or Dilution of the Official Market;
In accordance with rules and regulations to be issued by the Presumptions. – In the event that the petroleum products which
Secretary of Finance, in consultation with the Commissioner of do not contain the official marker or which contain the official
Internal Revenue and Commissioner of Customs and in market but are diluted beyond acceptable percentage approved
coordination with the Secretary of Energy, the Secretary of by the Secretary of Finance are found in the domestic market or
in the possession of anyone, or under any situation where said
petroleum products are subject to duties and taxes, it shall be
presumed that the same were withdrawn with the intention to
evade the payment of the taxes and duties due thereon; (i) The marking of petroleum products shall be mandatory within
five (5) years from the effectivity of this Act; and

(e) The use of fraudulent marker on the petroleum products shall

be considered prima facie evidence that the same have been (j) The term ‘random field test’ shall refer to periodic random
withdrawn or imported without payment of taxes and duties due inspections and test performed to establish qualitative and
thereon; quantitative positive result of fuel trafficking, which are
conducted on fuels found in warehouses, storage tanks, gas
stations and other retail outlets, and in such other properties or
equipment, including mechanisms of transportation of persons
(f) Engagement of Fuel Marking Provider. – The government shall engaged in the sale, delivery, trading, transportation, distribution,
engage only one fuel marking provider who shall, under the or importation of fuel intended for domestic market.
supervision and direction of the Commissioner of Internal
Revenue and Customs, be responsible for providing, monitoring,
and administering the fuel markers, provide equipment and
devices, conduct field and confirmatory tests, and perform such The term ‘confirmatory tests’ shall refer to the accurate and
other acts incident or necessary to the proper implementation of precise analytical test of the tested unmarked, adulterated, or
the provisions of this Act: Provided, That the fuel marking diluted fuel using a device, tool or equipment which will validate
provider shall provide an end-to-end solution to the Government, and confirm the result of the field test, that is immediately
including establishment and operation of testing facilities that are conducted in an accredited testing facility that is certified to ISO
certified to ISO 17025; 17025. [151]

(g) All costs pertaining to the procurement of the official markers

shall be borne by the refiner. Manufacturer or importer, of
petroleum products, as the case may be: Provided, That the
government may subsidize the cost of official fuel markers in the CHAPTER VI
first year of implementation;

EXCISE TAX ON MISCELLANEOUS ARTICLES

(h) Fuel Marking Program Funds. – In addition to any
appropriation to implement this Section and the last paragraph of
Section 171 of this Act, fees or charges collected in relation to the SEC. 149. Automobiles. - There shall be levied, assessed and
fuel marking program may be recorded as trust receipts of the collected an ad valorem tax on automobiles based on the
implementing agencies, and shall exclusively disbursed to defray manufacturer’s or importer’s selling price, net of excise and
the cost of services or equipment required to fully implement the value-added tax, in accordance with the following schedule:
said program, subject to rules and regulations to be issued by the
DOF-DBM-COA permanent committee;
Effective January 1, 2018[152] manufactured generally from surplus parts and components. It
shall also include jeepney substitutes that are manufactured from
brand-new single cab chassis or cowl chassis and locally
Net manufacturer’s price/importer’s selling Rate customized rear body that has continuous sideway row seats with
open rear door and without retractable glass windows.
Up to Six hundred thousand pesos (P600,000) Four percent
(4%)

Over Six hundred thousand pesos (P600,000) to One Million (d) Bus shall mean a motor vehicle of any configuration with
pesos (P1,000,000) Ten percent (10%) gross vehicle weight of 4.0 tons or more with any number of
wheels and axles, which is generally accepted and specifically
Over One million pesos (P1,000,000) to Four Million pesos designed for mass or public transportation.
Twenty percent (20%)

Over Four Million pesos (P4,000,000) Fifty percent (50%)

(e) Single cab chassis shall mean a motor vehicle with complete
Provided, That hybrid vehicles shall be subject to fifty percent engine power train and chassis equipped with a cab that has a
(50%) of the applicable excise tax rates on automobiles under maximum of two (2) doors and only one (1) row of seats.
this Section: Provided, further, That purely electric vehicles and
pick-ups shall be exempt from excise tax on automobiles.[153]
(f) Special purpose vehicle shall mean a motor vehicle designed
for specific applications such as cement mixer, fine truck, boom
As used in this Section- truck, ambulance and/or medical unit, and off-road vehicles for
heavy industries and not for recreational activities.

(a) Automobile shall mean any four (4) or more wheeled motor
vehicle regardless of seating capacity, which is propelled by (g) Hybrid electric vehicle shall mean a motor vehicle powered by
gasoline, diesel, electricity or any other motive power. Provided, electric energy, with or without provision for off-vehicle charging,
That for purposes of this Act, buses, trucks, cargo vans, in combination with gasoline, diesel or any other motive power.
jeeps/jeepneys [152] substitutes, single cab chassis and special- Provided, That, for purposes of this Act, a hybrid electric vehicle
purpose vehicles shall not be considered as automobiles. must be able to propel itself from a stationary condition using
solely electric motor.[153]

(b) Trucks/cargo van shall mean a motor vehicle of any

configuration that is exclusively designed for the carriage of Provided, That in the case of imported automobiles not for sale,
goods and with any number of wheels and axles: Provided, that the tax imposed herein shall be based on the total landed value,
pick-ups shall not be considered as trucks.[154] including transaction value, customs duty and all other charges.

(c) Jeepney/jeepney [152] substitutes shall mean as ”Philippine Automobiles used exclusively within the Freeport zone shall be
jeep or jeepney“ which are of the jitney type locally designed and exempt from excise tax.
 from an accident or trauma, or disfiguring disease, tumor, virus or
infection: Provided, further, That cases or treatments covered by
SEC. 150. Non-essential Goods. - There shall be levied, assessed the National Health Insurance Program shall not be subject to this
and collected a tax equivalent to twenty-percent (20%) based on tax.[155]
the wholesale price or the value of importation used by the
Bureau of Customs in determining tariff and customs duties, net
of excise tax and value-added tax, of the following goods:
SEC. 150-B. Sweetened Beverages. –

(a) All goods commonly or commercially known as jewelry,

whether real or imitation, pearls, precious and semi-precious (A) Rate and Base of Tax. – Effective January 1, 2018:
stones and imitations thereof; goods made of, or ornamented,
mounted or fitted with, precious metals or imitations thereof or
ivory (not including surgical and dental instruments, silver-plated (1) A tax of Six pesos (P6.00) per liter of volume capacity shall be
wares, frames or mountings for spectacles or eyeglasses, and levied, assessed and collected on sweetened beverages using
dental gold or gold alloys and other precious metals used in purely caloric sweeteners, and purely non-caloric sweeteners, or
filling, mounting or fitting the teeth); opera glasses and a mix of caloric and non-caloric sweeteners: Provided, further,
lorgnettes. The term ‘precious metals’ shall include platinum, That this tax rate shall not apply to sweetened beverages using
gold, silver and other metals of similar or greater value. The term high fructose corn syrup: Provided, further, That sweetened
‘imitations thereof‘ shall include platings and alloys of such beverages using purely coconut sap sugar and purely steviol
metals; glycosides shall be exempt from this tax; and

(b) Perfumes and toilet waters; (2) A tax of Twelve pesos (P12.00) per liter of volume capacity
shall be levied, assessed, and collected on sweetened beverages
using purely high fructose corn syrup or in combination with any
(c) Yachts and other vessels intended for pleasure or sports. caloric or non-caloric sweetener.

SEC. 150-A. Non-essential Services. – There shall be levied, (B) Definition of Terms. – As used in this Act:
assessed, and collected a tax equivalent to five percent (5%)
based on the gross receipts derived from the performance of
services, net of excise tax and value-added tax, on invasive (1) Sweetened beverages (SBs) refer to non-alcoholic beverages
cosmetic procedures, surgeries, and body enhancements directed of any constitution (liquid, powder, or concentrates) that are pre-
solely towards improving, altering, or enhancing the patient’s packaged and sealed in accordance with the Food and Drug
appearance and do not meaningfully promote the proper function Administration (FDA) standards, that contain caloric and/or non-
of the body or prevent or treat illness or disease. Provided, That caloric sweeteners added by the manufacturers, and shall
this tax shall not apply to procedures necessary to ameliorate a include, but not limited to the following, as described in the Food
deformity arising from, or directly related to, a congenital or Category System from Codex Alimentarius Food Category
developmental defect or abnormality, a personal injury resulting
Descriptors(Codex Stan 192-1995, Rev. 2017 or the latest) as
adopted by the FDA:
(4) Non-caloric sweetener refers to a substance that are
artificially or chemically processed that produces a certain
sweetness. These are substances which can be directly added to
(a) Sweetened juice drinks; beverages, such as aspartame, sucralose, saccharin, acesulfame
potassium, neotame, cyclmates and other non-nutritive
sweeteners approved by the Codex Alimentarius and adopted by
(b) Sweetened tea; the FDA.

(c) All carbonated beverages; (C) Exclusions. – The following products, as described in the food
category system from Codex Alimentarius Food Category
Descriptors (Codex Stan 192-1995, Rev. 2017 or the latest) as
(d) Flavored water; adopted by the FDA, as excluded from the scope of this Act:

(e) Energy and sports drinks; (1) All milk products, including plain milk, infant formula milk,
follow-on milk, growing up milk, powdered milk, ready-to-drink
milk and flavored milk, fermented milk, soymilk, and flavored
(f) Other powdered drinks not classified as milk, juice, tea, and soymilk;
coffee;

(2) One Hundred Percent (100%) Natural Fruit Juices – Original

(g) Cereal and grain beverages; and liquid resulting from the pressing of fruit, the liquid resulting from
the reconstitution of natural fruit juice concentrate, or the liquid
resulting from the restoration of water to dehydrated natural fruit
juice that do not have added sugar or caloric sweetener;
(h) Other non-alcoholic beverages that contain added sugar.

(3) One Hundred Percent (100%) Natural vegetable Juices –

(2) Caloric sweetener refers to a substance that is sweet and
Original liquid resulting from the pressing of vegetables, the
includes sucrose, fructose, and glucose that produces a certain
liquid resulting from the reconstitution of natural vegetables juice
sweetness;
concentrate, or the liquid resulting from the restoration of water
to dehydrated natural vegetable juice that do not have added
sugar or caloric sweetener;
(3) High fructose corn syrup refers to a sweet saccharide mixture
containing fructose and glucose which is derived from corn and
added to provide sweetness to beverages, and which includes
(4) Meal Replacement and Medically Indicated Beverages – Any
other similar fructose syrup preparations; and
liquid or powder drink/product for oral nutritional therapy for
persons who cannot absorb or metabolize dietary nutrients from Section 254 of the NIRC, as amended. Any person who willfully
food or beverages, or as source of necessary nutrition used due aids or abets in the commission of any such act or omission shall
to a medical condition and an oral electrolyte solution for infants be criminally liable in the same manner as the principal.
and children formulated to prevent dehydration due to illness;
and
If not a citizen of the Philippines, the offender shall be deported
immediately after serving the sentence without further
(5) Ground coffee, instant soluble coffee, and pre-packaged proceedings for deportation.
powdered coffee products.

(E) Specific Responsibility of the Food and Drug Administration

(D) Filing of Return and Payment of Excise Tax and Penalty. – (FDA). – Starting June 1, 2018, the FDA shall require all
manufacturers and importers of sweetened beverages covered by
this Act to indicate on the label the type of sweetener used, and
(1) Filing of Return and Payment of Excise Tax on Domestic and on sweetened beverages in powder form to indicate on the label
Imported Sweetened Beverages. – The provision of Sections 130 the equivalent of each serving per liter of volume capacity.
and 131 of the NIRC, as appropriate, shall apply to sweetened
beverages.
The FDA shall also conduct post-marketing surveillance of the
sweetened beverages on display in supermarkets, groceries or
(2) Penalty. – Upon final findings by the Commissioner of Internal retail stores and/or inspection of manufacturing sites to
Revenue and/or Customs that any manufacturer or importer, in determine compliance with the requirements of this Section.
violation of this Section, misdeclares or misrepresents in the Violations of the provisions of this Act, including but not limited
sworn statement provided in Section 130(c) of the NIRC, as to, mislabeling or misbranding, shall, to the extent applicable, be
amended, any pertinent data or information, the penalty of punishable under existing laws.
summary cancellation or withdrawal of the permit to engage in
business as manufacturer or importer of sweetened beverages as
provided under Section 268 of the NIRC, as amended, shall be (F) Duty of the Commissioner to Ensure Payment of Taxes. – It
imposed. shall be the duty of the Commissioner, among other things, to
prescribe a materially unique, secure and nonremovable
identifications, such as codes, stamps or other markings, to be
Any corporation, association or partnership liable for any of the firmly and conspicuously affixed on and form part of the label of
acts or omissions in violation of this Section shall be fined treble all excisable sweetened beverages.
the amount of deficiency taxes, surcharges, and interest which
may be assessed pursuant to this Section.
For this purpose, the abovementioned control measure shall be
caused by the Commissioner to be printed with adequate security
Any persons liable for any of the acts or omissions prohibited features to ensure the payment of excise tax on sweetened
under this Section shall be criminally liable and penalized under beverages.
 Effective January 1, 2020, One hundred fifty pesos (P150.00) per
metric ton.[160]
(G) Review of Implementation of the Sweetened Beverage Tax. –
At the start of the implementation of the sugar sweetened
beverage tax and every year thereafter, the Department of
Health, Department of Science and Technology, and Department (2) On all nonmetallic minerals and quarry resources, a tax of four
of Finance shall review the impact of these provisions on its percent (4%)[161] based on the actual market value of the gross
health objectives with the view to making recommendations on output thereof at the time of removal, in the case of those locally
the tax rate on these beverages.[156] extracted or produced; or the value used by the Bureau of
Customs in determining tariff and customs duties, net of excise
tax and value-added tax, in the case of importation.

Notwithstanding the provision of paragraph (4) of Subsection (A)

of this Section, locally extracted natural gas and liquefied natural
CHAPTER VII gas shall not be subject to the excise tax imposed herein.

EXCISE TAX ON MINERAL PRODUCTS (3) On all metallic minerals, a tax based on the actual market
value of the gross output thereof at the time of removal, in the
case of those locally extracted or produced; or the value used by
SEC. 151. Mineral Products. – the Bureau of Customs in determining tariff and customs duties,
net of excise tax and value-added tax, in the case of importation,
in accordance with the following schedule;
(A) Rates of Tax. - There shall be levied, assessed and collected
on minerals, mineral products and quarry resources, excise tax as
follows: (a) Copper and other metallic minerals, four percent (4%);[161]

(1) On domestic or imported[157] coal and coke, notwithstanding (b) Gold and chromite, four percent (4%).[161]
any incentives granted in any law or special law:

(4) On indigenous petroleum, a tax of six percent (6%)[162] of

Effective January 1, 2018, Fifty pesos (P50.00) per metric ton; the fair international market price thereof, on the first taxable
[158] sale, barter, exchange or such similar transaction, such tax to be
paid by the buyer or purchaser before removal from the place of
production. The phrase ‘first taxable sale, barter, exchange or
Effective January 1, 2019, One hundred pesos (P100.00) per similar transaction’ means the transfer of indigenous petroleum
metric ton;[159] and in its original state to a first taxable transferee. The fair
international market price shall be determined in consultation (3) ‘Mineral products’ shall mean things produced and prepared
with an appropriate government agency; in a marketable state by simple treatment processes such as
washing or drying, but without undergoing any chemical change
or process or manufacturing by the lessee, concessionaire or
For the purpose of this Subsection, ‘indigenous petroleum’ shall owner of mineral lands.
include locally-extracted mineral oil, hydrocarbon gas, bitumen,
crude asphalt, mineral gas and all other similar or naturally
associated substances with the exception of coal, peat, (4) ‘Quarry resources’ shall mean any common stone or other
bituminous shale and/or stratified mineral deposits. common mineral substances as the Director of the Bureau of
Mines and Geo-Sciences may declare to be quarry resources such
as, but not restricted to, marl, marble, granite, volcanic cinders,
(B) For purposes of this Section, the term – basalt, tuff and rock phosphate: Provided, That they contain no
metal or other valuable minerals in economically workable
quantities.
(1) ‘Gross output’ shall be interpreted as the actual market value
of minerals or mineral products or of bullion from each mine or
mineral land operated as a separate entity, without any (C) Notwithstanding the foregoing, gold which is sold, or
deduction from mining, milling, refining (including all expenses eventually sold, to the Bangko Sentral ng Pilipinas, in accordance
incurred to prepare the said minerals or mineral products in a with Section 32 (B)(7)(i), shall be exempt from the payment of
marketable state), as well as transporting, handling, marketing or excise tax: Provided, however, That if the excise tax due thereon
any other expenses: Provided, That if the minerals or mineral had been paid prior to the sale of gold to the Bangko Sentral ng
products are sold or consigned abroad by the lessee or owner of Pilipinas, the taxpayer may file a claim for refund or credit with
the mine under C.I.F. terms, the actual cost of ocean freight and the Commissioner for the excise tax paid.[163]
insurance shall be deducted: provided, however, That in the case
of mineral concentrate, not traded in commodity exchanges in
the Philippines or abroad, such as copper concentrate, the actual
market value shall be the world price quotations of the refined
mineral products content thereof prevailing in the said
commodity exchanges, after deducting the smelting, refining and CHAPTER VIII
other charges incurred in the process of converting the mineral
concentrates into refined metal traded in those commodity
exchanges.
ADMINISTRATIVE PROVISIONS REGULATING BUSINESS OF
PERSONS DEALING IN ARTICLES SUBJECT TO EXCISE TAX

(2) ‘Minerals’ shall mean all naturally occurring inorganic

substances (found in nature) whether in solid, liquid, gaseous or
SEC. 152. Extent of Supervision Over Establishments Producing
any intermediate state.
Taxable Output. - The BIR has authority to supervise
establishments where articles subject to excise tax are made or
kept. The Secretary of Finance shall prescribe rules and
regulations in which the process of production shall be conducted
insofar as may be necessary to secure a sanitary output and to
safeguard revenue, such rules and regulations to safeguard SEC. 155. Manufacturers and/or Importers to Provide Themselves
revenue may allow the appointment of third parties to monitor with Counting or Metering Devices to Determine Volume of
production and removal processes and volumes, and the Production and Importation. - Manufacturers of cigarettes,
exclusion of exciseable goods from duty-free barter transactions. alcoholic products, oil products and other articles subject to
[164] excise tax that can be similarly measured shall provide
themselves with such necessary number of suitable counting or
metering devices to determine as accurately as possible the
volume, quantity or number of the articles produced by them
SEC. 153. Records to be Kept by Manufacturers; Assessment under rules and regulations promulgated by the Secretary of
Based Thereon. - Manufacturers of articles subject to excise tax Finance, upon recommendation of the Commissioner: Provided,
shall keep such records as required by rules and regulations That the Department of Finance shall maintain a registry of all
recommended by the Commissioner and approved by the petroleum manufacturers and/or importers and the articles being
Secretary of Finance, and such records, whether of raw materials manufactured and/or imported by them: Provided, further, That
received into the factory or of articles produced therein, shall be the Department of Finance shall mandate the creation of a real-
deemed public and official documents for all purposes. time inventory of petroleum articles being manufactured,
imported or found in storage depots of such petroleum
manufacturers and/or importers: Provided, finally, that importers
The records of raw materials kept by such manufacturers may be of finished petroleum products shall also provide themselves with
used as evidence by which to determine the amount of excise Bureau-accredited metering devices to determine as accurately
taxes due from them, and whenever the amounts of raw material as possible the volume of petroleum products imported by them.
received into any factory exceeds the amount of manufactured or [165]
partially manufactured products on hand and lawfully removed
from the factory, plus waste removed or destroyed, and a
reasonable allowance for unavoidable loss in manufacture, the This requirement shall be complied with before commencement
Commissioner may assess and collect the tax due on the of operations.
products which should have been produced from the excess.

SEC. 156. Labels and Form of Packages. - All articles of domestic

The excise tax due on the products as determined and assessed manufacture subject to excise tax and all leaf tobacco shall be
in accordance with this Section shall be payable upon demand or put up and prepared by the manufacturer or producer, when
within the period specified therein. removed for sale or consumption, in such packages only and
bearing such marks or brand as shall be prescribed in the rules
and regulations promulgated by the Secretary of Finance; and
SEC. 154. Premises Subject to Approval by Commissioner. - No goods of similar character imported into the Philippines shall
person shall engage in business as a manufacturer of or dealer in likewise be packed and marked in such a manner as may be
articles subject to excise tax unless the premises upon which the required.
business is to conducted shall have been approved by the
Commissioner.
SEC. 157. Removal of Articles After the Payment of Tax. - When (A) Initial Bond.- In case of initial bond, the amount shall be equal
the tax has been paid on articles or products subject to excise to One Hundred thousand pesos (P100,000): Provided, That if
tax, the same shall not thereafter be stored or permitted to after six (6) months of operation, the amount of initial bond is
remain in the distillery, distillery warehouse, bonded warehouse, less than the amount of the total excise tax paid during the
or other factory or place where produced. However, upon prior period, the amount of the bond shall be adjusted to twice the tax
permit from the Commissioner, oil refineries and/or companies actually paid for the period.
may store or deposit tax-paid petroleum products and commingle
the same with its own manufactured products not yet subjected
to excise tax. Imported petroleum products may be allowed to be (B) Bond for the Succeeding Years of Operation. - The bonds for
withdrawn from customs custody without the prepayment of the succeeding years of operation shall be based on the actual
excise tax, which products may be commingled with the tax-paid total excise tax paid during the period the year immediately
or bonded products of the importer himself after securing a prior preceding the year of operation.
permit from the Commissioner: Provided, That withdrawals shall
be taxed and accounted for on a “first-in, first-out’ basis.
Such bond shall be conditioned upon faithful compliance, during
the time such business is followed, with laws and rules and
SEC. 158. Storage of Goods in Internal-revenue Bonded regulations relating to such business and for the satisfaction of all
Warehouses. - An internal-revenue bonded warehouse may be fines and penalties imposed by this Code.
maintained in any port of entry for the storing of imported or
manufactured goods which are subject to excise tax. The taxes
on such goods shall be payable only upon removal from such
SEC. 161. Records to be Kept by Wholesale Dealers. - Wholesale
warehouse and a reasonable charge shall be made for their
dealers shall keep records of their purchases and sales or
storage therein. The Commissioner, may, in his discretion, exact
deliveries of articles subject to excise tax, in such form as shall
a bond to secure the payment of the tax on any goods so stored.
be prescribed in the rules and regulations by the Secretary of
Finance. These records and the entire stock of goods subject to
tax shall be subject at all times to inspection of internal revenue
SEC. 159. Proof of Exportation; Exporter's Bond. - Exporters of officers.
goods that would be subject to excise tax, if sold or removed for
consumption in the Philippines, shall submit proof of exportation
satisfactory to the Commissioner, and, when the same is deemed
SEC. 162. Records to be Kept by Dealers in Leaf Tobacco. -
necessary, shall be required to give a bond prior to the removal
Dealers in leaf tobacco shall keep records of the products sold or
of the goods for shipment, conditioned upon the exportation of
delivered by them to other persons in such manner as may be
the same in good faith.
prescribed in the rules and regulations by the Secretary of
Finance, such records to be at all times subject to inspection of
internal revenue officers.
SEC. 160. Manufacturers' and Importers' Bond. - Manufacturers
and importers of articles subject to excise tax shall post a bond
subject to the following conditions:
SEC. 163. Preservation of Invoices and Stamps. - All dealers
whosoever shall preserve, for the period prescribed in Section
235, all official invoices received by them from other dealers or SEC. 165. Establishment of Distillery Warehouse. - Every distiller,
from manufacturers, together with the fractional parts of stamps when so required by the Commissioner, shall provide at his own
affixed thereto, if any, and upon demand, shall deliver or transmit expense a warehouse, and shall be situated in and constitute a
the same to any interval revenue officer. part of his distillery premises and to be used only for the storage
of distilled spirits of his own manufacture until the tax thereon
shall have been paid; but no dwelling house shall be used for
SEC. 164. Information to be Given by Manufacturers, Importers, such purpose. Such warehouse, when approved by the
Indentors and Wholesalers of any Apparatus or Mechanical Commissioner, is declared to be a bonded warehouse, and shall
Contrivance Specially for the Manufacture of Articles Subject to be known as a ‘distillery warehouse’.
Excise Tax and Importers, Indentors, Manufacturers or Sellers of
Cigarette Paper in Bobbins, Cigarette Tipping Paper or Cigarette
Filter Tips. - Manufacturers, indentors, wholesalers and importers SEC. 166. Custody of Distillery or Distillery Warehouse. - Every
of any apparatus or mechanical contrivance specially for the distillery or distillery warehouse shall be in the joint custody of
manufacture of articles subject to tax shall, before any such the revenue inspector, if one is assigned thereto, and of the
apparatus or mechanical contrivance is removed from the place proprietor thereof. It shall be kept securely locked, and shall at no
of manufacture or from the customs house, give written time be unlocked or opened or remain unlocked or opened unless
information to the Commissioner as to the nature and capacity of in the presence of such revenue inspector or other person who
the same, the time when it is to be removed, and the place for may be designated to act for him as provided by law.
which it is destined, as well as the name of the person by whom it
is to be used; and such apparatus or mechanical contrivance shall
not be set up nor dismantled or transferred without a permit in SEC. 167. Limitation on Quantity of Spirits Removed from
writing from the Commissioner. Warehouse. - No distilled spirits shall be removed from any
distillery, distillery warehouse, or bonded warehouse in quantities
of less than fifteen (15) gauge liters at any one time, except
"A written permit from the Commissioner for importing, bottled goods, which may be removed by the case of not less
manufacturing or selling of apparatus or mechanical contrivance than twelve (12) bottles.
specially for the manufacture of articles subject to excise tax,
[166] cigarette paper in bobbins or rolls, cigarette tipping paper
or cigarette filter tips is required before any person shall engage SEC. 168. Denaturing Within Premises. - For purposes of this Title,
in the importation, manufacture or sale of the said articles. No the process of denaturing alcohol shall be effected only within the
permit to sell said articles shall be granted unless the name and distillery premises where the alcohol to be denatured is produced
address of the prospective buyer is first submitted to the in accordance with formulas duly approved by the Bureau of
Commissioner and approved by him/her.[167] Records, showing Internal Revenue and only in the presence of duly designated
the stock of the said articles and the disposal thereof by sale of representatives of said Bureau.
persons with their respective addresses as approved by the
Commissioner, shall be kept by the seller, and records, showing
stock of said articles and consumption thereof, shall be kept by
SEC. 169. Recovery of Alcohol for Use in Arts and Industries. -
the buyer, subject to inspection by internal revenue officers."
Manufacturers employing processes in which denatured alcohol
used in arts and industries is expressed or evaporated from the
articles manufactured may, under rules and regulations to be
prescribed by the Secretary of Finance, upon recommendation of the sale, delivery, trading, transportation, distribution, or
the Commissioner, be permitted to recover the alcohol so used importation of fuel intended for the domestic market: Provided,
and restore it again to a condition suitable solely for use in
manufacturing processes.
(a) Random field testing shall be conducted in the presence of
revenue or customs officers, fuel marking provider, and the
SEC. 170. Requirements Governing Rectification and authorized representative of the owner of the fuel to be tested:
Compounding of Liquors. - Persons engaged in the rectification or Provided, that an employee assigned or working at the place
compounding of liquors shall, as to the mode of conducting their where the random field test is conducted shall be deemed an
business and supervision over the same, be subject to all the authorized representative of the owner;
requirements of law applicable to distilleries: Provided, That
where a rectifier makes use of spirits upon which the excise tax
has been paid, no further tax shall be collected on any rectified (b) All field tests shall be properly filmed or video-taped, and
spirits produced exclusively therefrom: Provided, further, That documented; and
compounders in the manufacture of any intoxicating beverage
whatever, shall not be allowed to make use of spirits upon which
the excise tax has not been previously paid.
(c) A sample of the randomly tested fuel shall be immediately
obtained by the revenue or customs officer upon discovering that
the same is unmarked, adulterated, or diluted:
SEC. 171. Authority of Internal Revenue Officer in Searching for
and Testing Taxable Articles. [4] - Any internal revenue officer
may, in the discharge of his official duties, enter any house,
Provided, further, That confirmatory fuel test certificates issued
building or place where articles subject to tax under this Title are
by fuel testing facilities shall be valid for any legal purpose from
produced or kept, or are believed by him upon reasonable
the date of issue, and shall constitute admissible and conclusive
grounds to be produced or kept, so far as may be necessary to
evidence before any court.[168]
examine, test, discover or seize the same.

SEC. 172. Detention of Package Containing Taxable Articles. - Any

He may also stop and search any vehicle or other means of
revenue officer may detain any package containing or supposed
transportation when upon reasonable grounds he believes that
to contain articles subject to excise tax when he has good reason
the same carries any article on which the excise tax has not been
to believe that the lawful tax has not been paid or that the
paid.
package has been or is being removed in violation of law, and
every such package shall be held by such officer in a safe place
until it shall be determined whether the property so detained is
Subject to rules and regulations to be issued by the Secretary of liable by law to be proceeded against for forfeiture; but such
Finance, the Commissioner of Internal Revenue or his authorized summary detention shall not continue in any case longer than
representatives may conduct periodic random field tests and seven (7) days without due process of law or intervention of the
confirmatory tests on fuel required to be marked under Section officer to whom such detention is to be reported.
148-A found in warehouses, storage tanks, gas stations and other
retails outlets, and in such other properties of persons engaged in