House of Representatives
Quezon City, Metro Manila

FIFTERNTH CONGRESS
First Regular Session

House BillNo. __ 4787

Introduced by REP. HHERMILANDO 1. MANDANAS

EXPLANATORY NOTE

Distilled spirits as defined in the National internal Revenue Code (NIRC)
9f 1997, as amended, is the substance known as ethyl aicohol, ethanol or spirits of
wine, including all ditutions, purifications and mixtures thereof, from whatever
source, by whatever process produced, and shail inchide whisky, brandy, rum,
gin and vodka, and other similar products or mixtores. Section 141 of the NIRC
of 1997, as amended, prescribes the excise tax rates on distilled spirits based on
the raw materials used per proof liter.

This bill seeks i efiminate the raw materials used in producing the
Sistilled spirits as the basis of imposing the excise tax, AH distilled spirits
regardless of materials from which they were produced will now be subjected to
the net retail price per bottle of seven hundred fifty milliliter (750 ml) volume
capacity excluding the excise tax and the value-added tax in determining the
particular specific tax a brand of distilled spirits will be classified, ‘This
proposed tax scheme on distilled spirits will harmonize the excise tax system
currently imposed on wines, fermented liquors and cigarettes as these exciseable
products are classified using the net retail price, excluding the excise tax and
value-added tax

Cognizant of ovr multilateral agreement, this proposed measure shall
erase the perceived discrimination between locally produced distilled spirits as
agamst imported ones. This proposed legislation would send a positive signal to



the global community that our country is serious in ensuring that our tax laws
are in compliance with international agreements.

The requirements of the national government for higher tax collection
consequent upon good governance to finance social and infrastructure needs
demand an increase in the amount and sphere of excise taxation of distilled
spirits. The potential incremental revenue will have an economic impact and
will hopefully trickle down to the greater majority of our citizenry who will
benefit with the improved government services under the present
administration.

With this restructuring of the excise tax on distilled spicits, the
government will generate a sizeable amount of revenues necessary 10 finance the
annual fiscal deficit the national government is facing. In view of the foregoing,
approval of this measure is earnestly sought.

RMILANDO 1 MANDANAS
resentative
2nd District, Batangas


Republic of the Philippines
House of Representatives
Quezon City, Metro Manila
FIFTEENTH CONGRESS

First Regular Session

House Bill No. 4787

Introduced by REP. HERM{LANDO 1. MANDANAS

AW ACT
RESTRUCTURING THE EXCISE TAX ON DISTILLED SPIRITS
AMENDING FOR THE PURPOSE SECTION 141 OF THE
NATIONAL INTERNAL REVENUE CODR GF 1957, AS
AMENDED

Be it enacted by the Senate und the House of Representatives of the Philippines in
Coagress assembled:

SECTION 1. Section 142 of the National Internal Revenue Code of 1997, as
amended, is hereby further amended to read as follows:

"SEC. 141. Distilled Spirits. - {On distilled spirits, there shall be collected,
subject to the provisions of Section 133 of this Code, excise tax as follows/]

1@) # produced from the sap of nipa, coconut, cassava, camote, or

. buri palm or #om the juice, syrup or sugar of the cane, provided
such materials are produced commercially in the country where
they are processed into distilled spirits, per proof liter, Eleven pesos
and sixty-five centavos (P11.65);|

(°) produced from raw materials other than those enumerated
in the preceding paragraph, the tax shall be] ON ALL DISTILLED
SPIRITS REGARDLESS OF MATERIALS FROM WICH


FRODUCED, THERE SHALL BE LAVIED, ASSESSED AND
COLLECTED &XCISE TAXES in accordance with the net retail
price per bottle of seven hundred fifty milliliter (750 mL) volume
capacity (excluding the excise lax and the value-edded ax) as
follows:

"(l) SEVENTY PESOS (P70.00) AND BELOW ~ TWENTY.
NINE PESOS AND THIRTY-SIX CENTAVOS (P29.36), PFR
PROOF LITER;

(2) MORE THAN SEVENTY PESOS (P70.00) UP TO ONE
‘AUNDRED AND TWENTY PESOS (P120.00) - FORTY-
FOUR PESOS AND FOUR CHENTAVOS (P44,04), PER
PROOF LITER;

(3) MORE THAN ONE HUNDRED AND TWENTY PESOS
(P 120.00) LP TO ONE HUNDRED AND £IGHTY PESOS
(P180.00) - FIFIY-EIGHY PESOS AND SEVENTY-TWO
CENTAVOS (P58.72), PER PROOF LITER;

{@)] @ [Less than] MORE THAN ONE HUNDRED AND
EIGHYY PESOS (P180.00) UP TO Two hundred and fifty
pesos (P256.00) - One hundred [twenty-six pesos (P126.00)]
FIFTY-EIGHT PESOS AND SEVENTY-THREF CENTAVOS
{(P158.73), per proof titer;

(@] (©) MORF THAN Two hondred and fifty pesos
(P250.00) up to Six hundred and seventy-five pesos (P675,00)
~ [lwo tundred fifty-two pesos (P252.00)} “THREE
HUNDRED SEVENTEEN PESOS AND FORTY-FOUR
CENTAVOS (P317.4), per proof liter; and

{(3)] (© More than Six hundred and seventy-five pesos
(7675.00) - [five hundred four pesos (P504,00)) SIX
HUNDRED THIRTY-FOUR PESOS AND NINETY
CENTAVOS (P634.90), per proof liter.

“I©1 Medicinal preparations, flavoring extracts, and all other
Preparations, except toilet preparations, of which, excluding water,
distilled spirits form the chief ingredient, shall be Subject to the same tax
as such chief ingredient.

x xX x


SEC. 2. ‘the Seccetary of Finance shall, upon the recommendation of the
Commissioner of Internal Revenue, promulgate the necessary rules and
regulations for the effective implementation of this Act,

SEC 3. All laws, dectees, ordinances, rules and yegulations, executive or
administrative orders, and such other presidential issnances which are

SEC. 4. This Act shall take effect fifteen (15) days after its Publication in the
Official Gazeite or in at least iwo (2) newspapers of general circulation Whichever comes
earlier.

Approved,