App Math

I. Description
Excise tax is a tax applicable to certain specified goods or articles manufactured or produced in the Philippines for domestic sale or consumption or for any other disposition, and to things imported into the Philippines.
Specific tax - an excise tax imposed on certain goods based on weight or volume capacity or any other physical unit of measurement. It applies to alcohol and alcohol products, tobacco and tobacco products, and petroleum products.
Ad valorem tax - an excise tax imposed on certain goods based on selling price or other specified value of the goods. It applies to mineral products, automobiles and non-essential goods.
Codal Reference (TITLE VI EXCISE TAXES ON CERTAIN GOODS)

· Alcohol Products - Secs. 141 to 143
· Tobacco Products - Secs. 144 to 147
· Petroleum Products - Sec. 148
· Mineral Products - Sec. 151
· Miscellaneous Articles - Secs. 149 - 150 II. GOODS THAT ARE SUBJECT TO EXCISE TAX:
Alcohol Products
· Distilled Spirits (produced from sap of nipa, coconut, cassava, camote, buri palm or sugarcane and other raw materials)
· Wines (sparkling wine, champagne, still wines, fortified wines)
· Fermented Liquors ( beer, lager beer, ale, porter, and other fermented liquors except tuba, basi, tapuy and similar fermented liquors)
Automobiles ( whether engine or gasoline fed , 1600 cc up to over 3001 cc engine displacement)
Non Essential Products
· Jewelry, pearls, precious and semi-precious, whether real or immitation
· Perfumes and toilet waters
· Yachts and other vessels for pleasure or sports
Mineral products
· Non-metallic minerals or quarry resources
· Gold and Chromite
· Copper

Indigenous Petroleum
· Natural Gas or Liquefied Natural Gas (locally extracted)
· Coal and Coke
· Petroleum Products
· Lubricating Oils
· Greases
· Processed Gas
· Waxes and Petrolatum
· Denatured alcohol used for motive power
· Unleaded Premium Gasoline
· Leaded Premium Gasoline
· Regular Gasoline
· Naptha
· Aviation Gasoline
· Aviation Turbo Jet Fuel
· Kerosene
· Diesel Fuel Oil
· Liquefied Petroleum Gas (LPG)
· Asphalt
· Bunker Fuel Oil and similar fuel
· Base stocks for lube, oils and greases, HVD, aromatic, extracts
Tobacco Products
· Smoking tobacco and other partially manufactured tobacco except cigar and cigarette
· Chewing tobacco
· Cigars
· Cigarettes, whether packed by hand or by machine
· Tobacco Inspection Fees III. REQUIREMENTS TO REGISTER WITH BIR:
For Alcohol Products
· Any person or entity may engage in business as distiller, manufacturer, producer, repacker, denaturer, wholesale dealer, or importer of distilled spirits and wines and must be duly registered with the Bureau of Internal Revenue as such. For Fermented Liquor
· Any person or entity may engage in business as brewer, operator of micro- brewery or micro brew pub, wholesale dealer, wholesale peddler or importer and must be duly registered with the Bureau of Internal Revenue as such.
For Tobacco Products
· Any person or entity who wants to engage in manufacturing, importing or selling at wholesale cigar and cigarettes, smoking and chewing tobacco and other manufactured tobacco and tobacco products must first secure the necessary permit to operate as such from the Commissioner of Internal Revenue.
For Petroleum Products
· Any person or entity desiring to engage in business as manufacturer, importer or repacker of petroleum products should apply in writing with the Commissioner, through the Revenue District Officer having jurisdiction over his place of production, by filing application for registration.
For Minerals and Mineral Products
· On Locally extracted Minerals, mineral products and quarry resources
· All lessees, concessionaires, owners or operators of mines, processors of minerals, licensees or permittees of quarry/mines, producers or manufacturers of mineral products, whether natural or juridical persons must register with the Bureau of Internal Revenue.
For Automobiles
· Any person or entity desiring to engage in business as manufacturer/assembler importer of automobiles for resale should apply in writing with the Commissioner of Internal Revenue, through the Revenue District Officer having jurisdiction over his place of production, by filing application for registration (1901 or 1903) as the case may be.
For Non-Essential Goods
· Any person or entity who wants to engage in the business as manufacturer or importer of non-essential goods must first secure the necessary permit to operate as such from the Commissioner of Internal Revenue.
Who are required to file Excise Tax Return? BIR Form 2200-A Excise Tax Return for Alcohol Products
· Manufacturer or producer of locally manufactured or produced alcohol products
· Owner or person having possession of the alcohol products which were removed from the place of production without the payment of excise tax
· Importers of alcohol products
BIR Form 2200-AN Excise Tax Return for Automobiles and Non-Essentials Products
· Manufacturer, producer or assembler of locally manufactured products/ assembled automobiles
· Manufacturer or producer of locally manufactured or produced jewelries, perfumes, toilet water, yachts, and other vessels intended for pleasure or sports (non-essentials)
· Buyer or transferee of automobile not previously taxed and subsequently sold or transferred by the tax-exempt entity-seller
· Owner or person having possession of the above articles which were removed from the place of production without the payment of excise tax
· Importers of any of articles considered as automobiles and non-essentials

BIR Form 2200-M Excise Tax Return for Mineral Products
· Owner, lessee, concessionaire or operator of mining claims
· First buyer, purchaser or transferee for local sale, barter, transfer or exchange of indigenous petroleum, natural gas or liquefied natural gas
· Owner or person having possession of the mineral and mineral products which were mined, extracted or quarried without the payment of excise tax
· Importer of minerals and mineral products
BIR Form 2200-P Excise Tax Return for Petroleum Products
· Manufacturer or producer of locally manufactured or produced petroleum products
· Any person engaged in reprocessing, re-refining or recycling of petroleum products previously taxed
· Importer or purchaser who resells or uses kerosene as aviation fuel
· Any person using denatured alcohol for motive power
· Owner or person having possession of petroleum products which were removed from the place of production without the payment of excise tax
· Importer of petroleum products
BIR Form 2200-T Excise Tax Return for Tobacco Products
· Manufacturer or producer of locally manufactured or produced tobacco products
· Wholesaler, manufacturer, producer, owner or operator of the redrying plant, as the case maybe, with respect to the payment of inspection fee on leaf tobacco, scrap, cigars, cigarettes and other tobacco products
· Owner or person having possession of tobacco products which were removed from the place of production without the payment of excise tax
· Importer of tobacco products

IV. TAX TABLES: DISTILLED SPIRITS | | | ATC | Description | Tax Rate | Tax Base | XA010 | Produced from sap of coconut, nipa, cassava, camote, buri palm or sugarcane | P 8.96 | Proof Liter | XA020 | Product in a pot still by small distillers (up to 100 liters/day and 50% alcohol volume) | P 4.48 | Proof Liter | XA031 | Produced from raw materials other than aboveNet Retail Price per bottle of 750 ml volume capacity (excluding VAT and Excise Tax) is less than P250.00 | P 84.00 | Proof Liter | XA032 | Net Retail Price per bottle of 750 ml volume capacity (excluding VAT and Excise Tax) is P250.00 up to P675.00 | P168.00 | Proof Liter | XA033 | Net Retail Price per bottle of 750 ml volume capacity (excluding VAT andExcise Tax) is more than P675.00 | P338.00 | Proof Liter | XA040 | Medicinal preparations, flavoring extracts and all other preparations, except toilet preparations, of which, excluding water, distilled spirits form the chief ingredient | | | | | | | | | | | WINES | | | | Sparkling Wines/Champagne, regardless of proof | | | ATC | Description | Tax Rate | Tax Base | XA061 | Net Retail Price per bottle (excluding VAT and Excise Tax) is P500.00 or less | P112.00 | Per Liter | XA062 | Net Retail Price per bottle (excluding VAT andExcise Tax) is more than P500.00 | P336.00 | Per Liter | XA070 | Still wines containing 14% or less alcohol | P 13.44 | Per Liter | XA080 | Still wines containing over 14% but not over 25% alcohol | P 26.88 | Per Liter | XA090 | Fortified wines containing more than 25% alcohol by volume (taxed as distilled spirits) | | Proof Liter | | | | | | | | | FERMENTED LIQUORS | | | Beer, lager beer, ale, porter and other fermented liquors | | | ATC | Description | Tax Rate | Tax Base | XA051 | Net Retail Price per liter (excluding VAT and Excise Tax) is less than P14.50 | P 6.89 | Per Liter | XA052 | Net Retail Price per liter (excluding VAT and Excise Tax) is less than P14.50 | P 10.25 | Per Liter | XA053 | Net Retail Price per liter (excluding VAT and Excise Tax) is less than P14.50 | P 13.61 | Per Liter |

BIR Form 2200-AN Non-Essential Products | | | AUTOMOBILE - Per Engine Displacement Gasoline | | ATC | Description | Tax Rate | Tax Base | XG020 | Up to 1600 cc | 15% | Manufacturer 's or Importers Selling Price* | XG030 | Up to 2000 cc | 35% | Manufacturer 's or Importers Selling Price* | XG040 | Up to 2700 cc | 50% | Manufacturer 's or Importers Selling Price* | XG050 | 2701 cc or over | 100% | Manufacturer 's or Importers Selling Price* | * Note : Manufacturer 's or Importers Selling Price* excludes VAT and Excise Tax | | | | | | | | | AUTOMOBILE - Per Engine Displacement | | | Diesel | | | | ATC | Description | Tax Rate | Tax Base | XG060 | Up to 1800 cc | 15% | Manufacturer 's or Importers Selling Price* | XG070 | Up to 2300 cc | 35% | Manufacturer 's or Importers Selling Price* | XG080 | Up to 3000 cc | 50% | Manufacturer 's or Importers Selling Price* | XG090 | 3001 cc or over | 100% | Manufacturer 's or Importers Selling Price* | * Note : Manufacturer 's or Importers Selling Price* excludes VAT and Excise Tax | | | | | | | | | Non-Essential Products | | | ATC | Description | Tax Rate | Tax Base | XG100 | Jewelry, pearls, precious and semi-precious, whether real or imitation | 20% | Wholesale PriceOr Value of Importations* | XG110 | Perfumes and Toilet Waters | 20% | Wholesale PriceOr Value of Importations* | XG120 | Yachts and other Vessels for Pleasure or Sports | 20% | Wholesale PriceOr Value of Importations* | *Note: Wholesale Price or Value of Importation excludes VAT and Excise Tax | | | | | | | | | BIR Form 2200-M Mineral Products | | | ATC | Description | Tax Rate | Tax Base | XM020 | Non-metallic minerals and quarry resources a) Locally extracted or produced | | | | | 2 % | Actual Market Value of gross Output | | b) Imported | | Value of Importation | | | 2% | | XM030 | Gold and Chromite | | | | a) Locally extracted or produced | 2 % | Actual Market Value of gross Output | | | | Value of Importation | | b) Imported | 2% | | XM040 | Copper | | | | a) Locally extracted or produced | 2% | Actual Market Value of gross Output | | | | Value of Importation | | b) Imported | 2% | | XM050 | Indigenous Petroleum | 3% | Fair International price | XM051 | Natural Gas or Liquefied Natural Gas (locally extracted) | 2% | Actual Market Value of gross Output | XM101 | Coal and Coke | P10.00 | Per metric ton | BIR Form 2200-P Petroleum Products | | | ATC | Description | Tax Rate | Tax Base | XP010 | Lubricating Oils | P 4.50 | Per Liter | XP020 | Greases | P 4.50 | Per Liter | XP030 | Processed Gas | P 0.05 | Per Liter | XP040 | Waxes and Petrolatum | P 3.50 | Per Liter | XP050 | Denatured alcohol used for motive power | P 0.05 | Per Liter | XP060 | Unleaded Premium Gasoline | P 4.35 | Per Liter | XP070 | Leaded Premium Gasoline | P 5.35 | Per Liter | XP080 | Regular Gasoline | P 4.80 | Per Liter | XP090 | Naptha | P 4.80 | Per Liter | XP100 | Naptha to be used for petro-chemicals | P 0.00 | Per Liter | XP110 | Aviation Gasoline | P 4.80 | Per Liter | XP120 | Aviation Turbo Jet Fuel | P 3.67 | Per Liter | XP130 | Kerosene | P 0.60 | Per Liter | XP131 | Kerosene used as aviation fuel | P 3.67 | Per Liter | XP140 | Diesel Fuel Oil | P 1.63 | Per Liter | XP150 | LPG used as Motive Power | P 1.63 | Per Liter | XP160 | Liquefied petroleum gas | P 0.00 | Per Liter | XP170 | Asphalt | P 0.56 | Per Liter | XP180 | Bunker Fuel Oil and similar fuel | P 0.30 | Per Liter | XP190 | Base stocks for lub, oils and greases, HVD, aromatic extracts, etc | P 4.50 | Per Liter or Kg | | | | | BIR Form 2200-T Tobacco Products | | | ATC | Description | Tax Rate | Tax Base | XT010 | Smoking tobacco and other partially manufactured tobacco, except cigars and cigarettes | P 0.75 | Per kilo | XT020 | Chewing tobacco | P 0.60 | Per kilo | XT030 | Cigars | P 1.12 | Per cigar | XT040 | Cigarettes packed by hand | P 0.40 | Per pack | | Cigarettes packed by machines | XT050 | Net Retail Price (excluding VAT & Excise) exceeds P 10.00 per pack | P13.44 | Per pack | XT060 | Net Retail Price (excluding VAT & Excise) is P6.51 up to P 10.00 per pack | P 8.96 | Per pack | XT070 | Net Retail Price (excluding VAT & Excise) is P 5.00 up to P 6.50 per pack | P 5.60 | Per pack | XT130 | Net Retail Price (excluding VAT & Excise) is below P 5.00 per pack | P 1.12 | Per pack | | Tobacco Inspection Fees | XT080 | a) For Cigars | P 0.50 | Per 1000 pcs. or fraction thereof | XT090 | b) For Cigarettes | P 0.10 | Per 1000 pcs. Or fraction thereof | XT100 | c) For leaf tobacco | P 0.02 | Per kilo or fraction thereof | XT110 | d) For scraps and other manufactured tobacco products | P 0.03 | Per kilo or fraction thereof |

V. PHILIPPINE ISSUE ON SIN TAX LAW

The “Sin Tax” Law
A sin tax is a kind of sumptuary tax: a tax specifically levied on certain generally socially proscribed goods and services, for example alcohol and tobacco, candies, soft drinks, fast foods, coffee, and gambling.
This bill is a very controversial issue in the Philippines today as there are different groups that are battling on the pros and cons of the said bill.
One of the objectives of the proposed increase in “sin” taxes by the government is to make alcohol and tobacco less accessible, Sen. Pia Cayetano indicated to industry leaders during the hearing of the Senate panel.
Also, according to Senator Franklin Drilon, Passing the Sin Tax Bill will make the country compliant with the World Trade Organization (WTO) standards against discriminatory taxation on alcohol, and spare key exports like tuna from countermeasures that could hurt their competitiveness.
At the same time, it will enhance the country’s financial standing, making it easier to attain investments grade status that will cut interest rates on Philippine loans, freeing up more funds for social services, said the chairman of the Senate Committee on Finance.
“We must pass the sin-tax bill in order for us to be compliant with the standards set by WTO on alcohol taxation since our excise tax on spirits and liquor are discriminatory in nature, [favoring] the local brands against foreign products,” Drilon explained.
The WTO is questioning Manila’s alcohol taxation and if this is not corrected, other exports products such as tuna will be adversely impacted, he added (By: Karl John C. Reyes, InterAksyon.com)
Given that Philippines have scandalously low taxes on two commodities (tobacco and liqour) that have been proven killers of individuals, destroyers of families, and threats to national economic security.
According to an article in inquirer.net (by Walden Bello), the current multi-tiered tax system has made cigarettes so much cheaper in the Philippines than in other countries. A pack of the most popular foreign-brand cigarettes costs on the average P27.72 in the Philippines compared to P365.2 in Singapore, P146.08 in Malaysia, P104.84 in Thailand, and P64.68 in Indonesia.
The reason cigarettes are so cheap in the Philippines is that excise taxes on them have not been indexed to inflation and the classification of the different brands remains what it was in 1996. For instance, Fortune and Champion, two brands, continue to be classified as “low price” and taxed at P2.72 per pack, whereas they should now be classified as “premium” and taxed at P28.30 per pack. Likewise, Hope and Winston are classified as “medium” and taxed at P7.56 per pack instead of being reclassified as premium and taxed at P28.30 per pack.
The biggest beneficiary of the current, unreformed system is the merged conglomerate of Lucio Tan’s Fortune Tobacco and the transnational firm Philip Morris, which has controlled some 95 per cent of market over the last 15 years. This conglomerate represents the worst of all possible worlds for health advocates, proponents of equitable tax reform, and groups seeking corporate accountability: a transnational alliance headed by a notorious tax evader engaged in the production of a deadly commodity that is being squeezed out in other parts of the world by rising global health consciousness
The failure to reform the excise tax has allowed the tobacco monopoly to keep prices artificially low while reaping billions of pesos in profit at the expense of national health. The smoking prevalence rate for the Philippines is 28.3—meaning nearly 30 per cent of the population smokes. Comparable rates are 13.6 for Singapore, 20.7 for Thailand, and 21.5 for Malaysia. The Philippines now ranks 9th in the work in terms of the adult male smoking population and 16th in the adult female smoking population. From 2003 to 2007, there was a staggering 40% increase in the youth smoking prevalence to 27.3%.
Tobacco is a killer, but it kills off proportionally more of the poor than the rich.

300,000 people now die yearly from smoking-related diseases, and the majority of them come from the poor. This is not surprising since four out of ten of the poorest 20 per cent of Filipino adults are current smokers, compared to one out of four of the richest 20 per cent who smoke regularly.

Liquor has also been kept artificially cheap by low excise taxes and outdated classification. 50% of road accidents is due to drunk driving deaths. Alcohol consumption is estimated to cause from 20% to 50% of liver cirrhosis, epilepsy, poisonings, violence and several types of cancer. 2.5 million people die annually from harmful alcohol use; this comes to 4 per cent of all deaths.

Components of the Sin Tax Bill

The long overdue revision of the excise taxes on alcohol and tobacco products HB 5727—the so-called “Sin Tax Bill”–will be debated on the floor of the House of Representatives in the next few days, with its proponents seeking approval of the bill on final reading by the time the body adjourns its second session of the 15th Congress ends on June 6. The bill will increase tax rates on tobacco and alcohol products, adopt a simplified tax system for these products, index the taxes to inflation, and remove the freeze on price classifications.

Under the bill, for instance, the tax on cigarettes packed by machine will rise from P2.72 to P12 per pack. This will create a massive disincentive to smoking, especially among the youth who are at an age when they are most vulnerable to seduction by the tobacco industry but still lack the means to support this habit.

According to the Action for Economic Reform (AER) and other advocates, the bill, if passed, will generate P33 billion in new revenue annually. Part of the income stream will finance the expansion of the Universal Health Care Program (UHC), so that it can provide better health care services, especially for poor Filipinos. The added funds will contribute significantly towards alleviating the smoking-related disease burden that was estimated at P177.2 billion in 2011.

The approval of this bill will also stand against cancer. Smoking may be the leading cause of lung cancer, it can also increase the risks of other types of cancer, such as cancer of the larynx, esophagus etc.

Citing all those facts would therefore give us a clear vision on what would this bill if passed on could do to our nation’s health, Philippine economy, youth and to the poor.

References:

Excise Tax. http://www.bir.gov.ph/lumangweb/tax_excise.html
Walden Bello. Inquirer.Net. The “Sin Tax: Bill: Promoting Nation’s Health and Pluggion Lucio Tan’s Loophole for Legal Tax Evasion.
Karl John C. Reyes. InterAksyon.com. Sin Tax bill passage to impact PH trade, finance and social services – Drilon

References: Excise Tax. http://www.bir.gov.ph/lumangweb/tax_excise.html Walden Bello. Inquirer.Net. The “Sin Tax: Bill: Promoting Nation’s Health and Pluggion Lucio Tan’s Loophole for Legal Tax Evasion. Karl John C. Reyes. InterAksyon.com. Sin Tax bill passage to impact PH trade, finance and social services – Drilon