Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
Third Regular Session

8334

House Bill No.

Introduced by Representative John Marvin “Yul Servo” C. Nieto

Explanatory Note

As a manifestation of support to this timely piece of legislation, this representation
respectfully refiles this measure, which has constantly been receiving support from the
past and present Congress.

Republic Act (RA) No. 10351 or the Excise Tax Reform Law on alcohol and tobacco
products was signed in December 2012 and took effect in January 2013. The law had a
positive impact on both fiscal and public health. RA 10351 corrected the long-standing
weaknesses of the tobacco and alcohol excise tax system and increased the rates to
reduce the demand for alcohol and tobacco products. It also raised much needed
revenues to fund the Universal Health Care (UHC) program of the government.

The Excise Tax Reform Law succeeded in attaining its revenue objectives. Since its
implementation in 2013, the government collected Php 242.0 billion in incremental
revenues (CY 2013-2016). The incremental revenues derived from RA 10351 were
largely earmarked for UHC. The Department of Health (DOH) budget almost tripled
from Php 53.23 billion in 2013 to Php 148.5 billion in 2017 or a growth of 179.0%. A
large amount of the incremental revenues earmarked for health is allocated for
premium subsidies for the health insurance of indigents and senior citizens not covered
by the National Health Insurance Program.

Excise tax on alcohol products only account for an average of 33 percent of the total
alcohol and tobacco excise tax collections while excise tax on tobacco products account
for the remaining 67 percent from 2013-2016. However, data from the Family Income
and Expenditure Survey (FIES) in 2012 prior to the implementation of the Sin Tax Law,
shows alcohol accounts for 40% of the total alcohol and tobacco expenditure while
tobacco accounts for 60% of the said total. This bill seeks to increase the tax on
alcohol products to approximate the 40-60% sharing of alcohol and tobacco
expenditure. Moreover, excise tax collections and the volume of removals of alcohol
products continued to increase even after the implementation of RA 10351. This is an
indication that the increase in the rates for alcohol products implemented in 2013 was
not enough to reduce the consumption of alcohol.

This bill seeks to increase the excise tax rates on alcohol products and the indexation
rate to 10% to account for inflation and income. Moreover, it also seeks to remove the
distinction on whether fermented liquors are brewed and sold in microbreweries and
pubs or in factories for simpleradministration. Also, to further simplify the tax


administration on spirits, the tax shall be based on the basis of volume or per liter and
no longer on "per proof liter." The incremental revenues that will be generated will {ish}
social services and infrastructure programs of the government.

Alcohol drinking leads to behaviors like drunk driving and domestic violence. According
to the Online National Electronic Injury Surveillance System of the Department of
Health, there were 2,048 vehicular accidents due to alcohol intoxication or 9.2 percent
of the 22,080 transport or vehicular crash-related injury cases in 2015. This increased
from 1,295 alcohol-related accidents in 2013 and 1,272 alcohol-related accidents in
2014. Moreover, excessive alcohol drinking also leads to diseases like cirrhosis or liver
damage and pancreatitis among others. Further, the World Health Organization (WHO)
disclosed that excessive intake of alcohol killed more than 3 million people in 2016,
mostly male. The WHO added around a third of alcohol-related deaths were a result of
injuries, including car crashes and self-harm, while about one in five were due to either
digestive disorders or cardiovascular diseases.

The excise tax on alcohol should be increased to discourage consumption and to make
the consumers of alcohol bear the cost of the negative effect on other people not
consuming the product.

In view of the foregoing, the passage of this bill is earnestly sought.

JOHN IN “YL SERVO” NIETO


Republic of the Philippines.
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
Third Regular Session
8334

House Bill No.

Introduced by Representative John Marvin “Yul Servo” C. Nieto

AN ACT
AMENDING SECTIONS 141, 142, AND 143 OF REPUBLIC ACT NO. 8424, AS
AMENDED, OTHERWISE KNOWN AS “THE NATIONAL INTERNAL REVENUE
CODE OF 1997”

Be it enacted by the Senate and the House of Representatives of the Philippines in
Congress assembled:

SECTION 1. Chapter III of the National Internal Revenue Code of 1997 (NIRC), as
amended, is hereby amended, which shall read as follows:

CHAPTER III - EXCISE TAX ON ALCOHOL PRODUCTS

SEC. 141. Distilled Spirits. - On distilled spirits, subject to the provisions of Section
133 of thisCode, an excise tax shall be levied, assessed and collected based on the
following schedules:

[(a) Effective on January 1, 2013
(1) An ad valorem tax equivalent to fifteen percent (15%) 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, a specific tax of Twenty
pesos

(P20.00) per proof liter.

(b) Effective on January 1, 2015
(1) An ad valorem tax equivalent to twenty percent (20%) 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, a specific tax rate of
Twenty pesos

(P20.00) per proof liter.


(c) In addition to the ad valorem tax herein imposed, the specific tax rate of Twenty
pesos(P20.00) per proof liter imposed under this Section shall be increased by four
percent (4%) everyyear thereafter effective on January 1, 2016, through revenue
regulations issued by the Secretaryof Finance.]

(A) EFFECTIVE ON JANUARY 1, 2019
(1) AN AD VALOREM TAX EQUIVALENT TO TWENTY-FIVE PERCENT
(25%) 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, A
SPECIFIC TAX OF FORTY PESOS (P40.00) PER PROOF LITER.

(B) EFFECTIVE ON JANUARY 1, 2020
(1) AN AD VALOREM TAX EQUIVALENT TO TWENTY-FIVE PERCENT(25%)
OF THE NET RETAIL PRICE (EXCLUDING THE EXCISE TAX ANDTHE
VALUE-ADDED TAX) PER PROOF ; AND
(2) IN ADDITION TO THE AD VALOREM TAX HEREIN IMPOSED,
ASPECIFIC TAX OF FORTY FIVE PESOS (P45.00) PER PROOF LITER.

(C) EFFECTIVE ON JANUARY 1, 2021

(1) AN AD VALOREM TAX EQUIVALENT TO TWENTY-FIVE PERCENT(25%)
OF THE NET RETAIL PRICE (EXCLUDING THE EXCISE TAX ANDTHE
VALUE-ADDED TAX) PER PROOF; AND

(2) IN ADDITION TO THE AD VALOREM TAX HEREIN IMPOSED,
ASPECIFIC TAX OF FIFTY PESOS (P50.00) PER PROOF LITER.

(D) EFFECTIVE ON JANUARY 1, 2022

(1) AN AD VALOREM TAX EQUIVALENT TO TWENTY-FIVE PERCENT(25%)
OF THE NET RETAIL PRICE (EXCLUDING THE EXCISE TAX ANDTHE
VALUE-ADDED TAX) PER PROOF; AND

(2) IN ADDITION TO THE AD VALOREM TAX HEREIN IMPOSED,
ASPECIFIC TAX OF FIFTY FIVE PESOS (P55.00) PER PROOF LITER.

(E) IN ADDITION TO THE AD VALOREM TAX HEREIN IMPOSED, THE
SPECIFICTAX IMPOSED UNDER THIS SECTION SHALL BE INCREASED BY TEN
PERCENT(10%) EVERY YEAR THEREAFTER EFFECTIVE ON JANUARY 1, 2023,
THROUGHREVENUE REGULATIONS ISSUED BY THE SECRETARY OF FINANCE.

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 sametax as such chief ingredient.


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 besubsequently separated as pure or impure spirits, or transformed
into ‘any other substance eitherin the process of original production or by any
subsequent process.

‘Spirits or distilled spirits’ is the substance known as ethyl alcohol, ethanol or spirits of
wine, including all dilutions, purifications and mixtures thereof, from whatever source,
by whateverprocess produced, and shall include whisky, brandy, rum, gin and vodka,
and other similarproducts or mixtures.

‘Proof spirits’ is liquor containing one-half (1/2) of its volume of alcohol of a specific
gravity ofseven thousand nine hundred and thirty-nine ten thousandths (0.7939) at
fifteen degreescentigrade (150C). A ‘proof liter’ means a liter of proof spirits.

‘Net retail price’ shall mean the price at which the distilled spirits is sold on retail in at
least five(5) major supermarkets in Metro Manila, excluding the amount intended to
cover the applicableexcise tax and the value-added tax. For distilled spirits which are
marketed outside MetroManila, the ‘net retail price’ shall mean the price at which the
distilled spirits is sold in at leastfive (5) major supermarkets in the region excluding the
amount intended to cover the applicableexcise tax and the value-added tax. THIS
SHALL INITIALLY BE PROVIDED BY THEMANUFACTURER THROUGH A SWORN
STATEMENT AND SHALL BEVALIDATED BY THE BUREAU OF INTERNAL
REVENUE THROUGH A PRICESURVEY.

Major supermarkets, as contemplated under this Act, shall be those with the highest
annual grosssales in Metro Manila or the region, as the case may be, as determined by
the BUREAU OFINTERNAL REVENUE (BIR) [National Statistics Office], and shall exclude
retail outlets orkiosks, convenience or sari-sari stores, 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 distilled spirit is not
sold in major supermarkets, the price surveycan be conducted in retail outlets where
said distilled spirit is sold in Metro Manila or the region,as the case may be, upon the
determination of the Commissioner of Internal Revenue.

The net retail price shall be determined by the Bureau of Internal Revenue (BIR)
through aBIANNUAL price survey under oath.

The methodology and all pertinent documents used in the conduct of the latest price
survey shallbe submitted to the Congressional Oversight Committee on the
Comprehensive Tax ReformProgram (COCCTRP) created under Republic Act No. 8240.

Understatement of the suggested net retail price by as much as fifteen percent (15%)
of the actualnet retail price shall render the manufacturer or importer liable for
additional excise taxequivalent to the tax due and difference between the understated
suggested net retail price andthe actual net retail price.


Distilled spirits introduced in the domestic market after the effectivity of this Act shall
beinitially taxed according to their suggested net retail prices.

‘Suggested net retail price’ shall mean the price (excluding the value added tax and the
excisetax) at which locally manufactured or imported distilled spirits are intended by
the manufactureror importer to be sold on retail in major supermarkets or retail outlets
in Metro Manila for thosemarketed nationwide, and in other regions, for those with
regional markets. At the end of three(3) months from the product launch, the Bureau
of Internal Revenue shall validate the suggestednet retail price of the new brand
against the net retail price as defined herein and initiallydetermine the correct tax on a
newly introduced distilled spirits. After the end of nine (9) monthsfrom such validation,
the Bureau of Internal Revenue shall revalidate the initially validated netretail price
against the net retail price as of the time of revalidation in order to finally determinethe
correct tax on a newly introduced distilled spirits.

[All distilled spirits existing in the market at the time of the effectivity of this Act shall
be taxedaccording to the tax rates provided above based on the latest price survey of
the distilled spiritsconducted by the Bureau of Internal Revenue.]

The methodology and all pertinent documents used in the conduct of the latest price
survey shallbe submitted to the Congressional Oversight Committee on the
Comprehensive Tax ReformProgram created under Republic Act No. 8240.

Manufacturers and importers of distilled spirits shall, within thirty (30) days from the
effectivityof this Act, and within the first five (5) days of every third month thereafter,
submit to theCommissioner a sworn statement of the volume of sales AND
REMOVALS for each particularbrand of distilled spirits sold at his establishment for the
three-month period immediatelypreceding.

Any manufacturer or importer who, in violation of this Section, misdeclares or
misrepresents inhis or its sworn statement herein required any pertinent data or
information shall, upon finalfindings by the Commissioner that the violation was
committed, be penalized by a summarycancellation or withdrawal of his or its permit to
engage in business as manufacturer or importerof distilled spirits.

Any corporation, association or partnership liable for any of the acts or omissions in
violation ofthis Section shall be fined treble the amount of deficiency taxes, surcharges
and interest whichmay be assessed pursuant to this Section.

Any person liable for any of the acts or omissions prohibited under this Section shall
becriminally liable and penalized under Section 254 of this Code. Any person who
willfully aids orabets in the commission of any such act or omission shall be criminally
liable in the samemanner as the principal.


If the offender is not a citizen of the Philippines, he shall be deported immediately after
servingthe sentence, without further proceedings for deportation.

SEC. 142. Wines. - On wines, there shall be collected per liter of volume capacity
effective on[January 1, 2013] JANUARY 1, 2019, the following excise taxes:

(a) Sparkling wines/champagnes regardless of proof, if the net retail price per
bottle ofseven hundred fifty milliliter (750 ml.) volume capacity (excluding the
excise tax andvalue-added tax) is:

(1) Five hundred pesos (P500.00) or less - [Two hundred fifty pesos
(P250.00)] THREE HUNDRED THIRTYFIVE PESOS (P335.00); and

(2) More than Five hundred pesos (P500.00) - [Seven hundred pesos
(P700.00)]NINE HUNDRED THIRTYSEVEN PESOS (P937.00).

(b) Still wines and carbonated wines containing fourteen percent (14%) of
alcohol byvolume or less, [Thirty pesos (P30.00)] FORTY PESOS (P40.00);
and

(c) Still wines and carbonated wines containing more than fourteen percent
(14%) but notmore than twenty-five percent (25%) of alcohol by volume, [Sixty
pesos (P60.00) EIGHTY PESOS (P80.00).

The rates of tax imposed under this Section shall be increased by [four percent (4%)]
TENPERCENT (10%) every year thereafter effective on January 1, [2014] 2020,
through revenueregulations issued by the Secretary of Finance.

Fortified wines containing more than twenty-five percent (25%) of alcohol by volume
shall betaxed as distilled spirits. ‘Fortified wines’ shall mean natural wines to which
distilled spirits areadded to increase their alcohol strength.

‘Net retail price’ shall mean the price at which sparkling wine/champagne is sold on
retail in atleast five (5) major supermarkets in Metro Manila, excluding the amount
intended to cover theapplicable excise tax and the value-added tax. For sparkling
wines/champagnes which aremarketed outside Metro Manila, the ‘net retail price’ shall
mean the price at which the wine issold in at least five (5) major supermarkets in the
region excluding the amount intended to coverthe applicable excise tax and the value-
added tax. THIS SHALL INITIALLY BE PROVIDEDBY THE MANUFACTURER
THROUGH A SWORN STATEMENT AND SHALL BEVALIDATED BY THE BUREAU
OF INTERNAL REVENUE THROUGH A PRICESURVEY.

Major supermarkets, as contemplated under this Act, shall be those with the highest
annual grosssales in Metro Manila or the region, as the case may be, as determined by
the BUREAU OFINTERNAL REVENUE [National Statistics Office], and shall exclude
retail outlets or kiosks,convenience or sari-sari stores, 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 sparkling
wine/champagne is not sold in major supermarkets, theprice survey can be conducted
in retail outlets where said sparkling wine/champagne is sold inMetro Manila or the
region, as the case may be, upon the determination of the Commissioner oflnternal
Revenue.

The net retail price shall be determined by the Bureau of Internal Revenue through
aBIANNUAL price survey under oath.

The methodology and all pertinent documents used in the conduct of the latest price
survey shallbe submitted to the Congressional Oversight Committee on the
Comprehensive Tax ReformProgram created under Republic Act No. 8240.

Understatement of the suggested net retail price by as much as fifteen percent (15%)
of the actualnet retail price shall render the manufacturer or importer liable for
additional excise taxequivalent to the tax due and difference between the understated
suggested net retail price andthe actual net retail price.

Sparkling wines/champagnes introduced in the domestic market after the effectivity of
this Actshall be initially tax classified according to their suggested net retail prices.

‘Suggested net retail price’ shall mean the price (excluding VAT and excise tax) at
which locallymanufactured or imported sparkling wines/champagnes are intended by
the manufacturer orimporter to be sold on retail in major supermarkets or retail outlets
in Metro Manila for thosemarketed nationwide, and in other regions, for those with
regional markets. At the end of three(3) months from the product launch, the Bureau
of Internal Revenue shall validate the suggestednet retail price of the sparkling
wine/champagne against the net retail price as defined herein andinitially determine
the correct tax bracket to which a newly introduced sparklingwine/champagne shall be
classified. After the end of nine (9) months from such validation, theBureau of Internal
Revenue shall revalidate the initially validated net retail price against the netretail price
as of the time of revalidation in order to finally determine the correct tax bracket
towhich a newly introduced sparkling wine/champagne shall be classified.

The proper tax classification of sparkling wines/champagnes, whether registered before
or afterthe effectivity of this Act, shall be determined every two (2) years from the
date of effectivity ofthis Act.

[All sparkling wines/champagnes existing in the market at the time of the effectivity of
this Actshall be taxed according to the net retail prices and the tax rates provided
above based on thelatest price survey of the sparkling wines/champagnes conducted
by the Bureau of InternalRevenue.]

The methodology and all pertinent documents used in the conduct of the latest price
survey shallbe submitted to the Congressional Oversight Committee on the
Comprehensive Tax ReformProgram created under Republic Act No. 8240.


Manufacturers and importers of wines shall, within thirty (30) days from the effectivity
of thisAct, and within the first five (5) days of every month thereafter, submit to the
Commissioner asworn statement of the volume of sales AND REMOVALS for each
particular brand of winessold at his establishment for the three-month period
immediately preceding.

‘Any manufacturer or importer who, in violation of this Section, misdeclares or
misrepresents inhis or its sworn statement herein required any pertinent data or
information shall, upon finalfindings by the Commissioner that the violation was
committed be penalized by a summarycancellation or withdrawal of his or its permit to
engage in business as manufacturer or importerof wines.

Any corporation, association or partnership liable for any of the acts or omissions in
violation ofthis Section shall be fined treble the amount of deficiency taxes, surcharges
and interest whichmay be assessed pursuant to this Section.

Any person liable for any of the acts or omissions prohibited under this Section shall
becriminally liable and penalized under Section 254 of this Code. Any person who
willfully aids orabets in the commission of any such act or omission shall be criminally
liable in the samemanner as the principal. If the offender is not a citizen of the
Philippines, he shall be deportedimmediately after serving the sentence, without
further proceedings for deportation.

SEC. 143. Fermented Liquor. - There shall be levied, assessed and collected an excise
tax onbeer, lager beer, ale, porter and other fermented liquors except tuba, basi, tapuy
and similardomestic fermented liquors in accordance with the following schedule:

[Effective on January 1, 2013
(a) If the net retail price (excluding the excise tax and the value-added tax) per
liter ofvolume capacity is Fifty pesos and sixty centavos (P50.60) or less, the tax
shall be Fifteenpesos (P15.00) per liter; and
(b) If the net retail price (excluding the excise tax and the value-added tax) per
liter ofvolume capacity is more than Fifty pesos and sixty centavos (P50.60), the
tax shall be Twenty pesos (P20.00) per liter.

Effective on January 1, 2014

(a) If the net retail price (excluding the excise tax and the value-added tax) per
liter ofvolume capacity is Fifty pesos and sixty centavos (P50.60) or less, the tax
shall beSeventeen pesos (P17.00) per liter; and

(b) If the net retail price (excluding the excise tax and the value-added tax) per
liter ofvolume capacity is more than Fifty pesos and sixty centavos (P50.60), the
tax shall beTwenty-one pesos (P21.00) per liter.


Effective on January 1, 2015

(a) If the net retail price (excluding the excise tax and the value-added tax) per
liter ofvolume capacity is Fifty pesos and sixty centavos (P50.60) or less, the tax
shall beNineteen pesos (P19.00) per liter; and

(b) If the net retail price (excluding the excise tax and the value-added tax) per
liter ofvolume capacity is more than Fifty pesos and sixty centavos (P50.60), the
tax shall beTwenty-two pesos (P22.00) per liter.

Effective on January 1, 2016

(a) If the net retail price (excluding the excise tax and the value-added tax) per
liter ofvolume capacity is Fifty pesos and sixty centavos (P50.60) or less, the tax
shall beTwenty-one pesos (P21.00) per liter; and

(b) If the net retail price (excluding the excise tax and the value-added tax) per
liter ofvolume capacity is more than Fifty pesos and sixty centavos (P50.60), the
tax shall beTwenty-three pesos (P23.00) per liter.

Effective on January 1, 2017, the tax on all fermented liquors shall be Twenty-three
pesos andfifty centavos (P23.50) per liter.)

EFFECTIVE ON JANUARY 1, 2019, THE TAX ON ALL FERMENTED
LIQUORSREGARDLESS IF MANUFACTURED IN FACTORIES OR SOLD AND
BREWED ATMICRO-BREWERIES OR SMALL ESTABLISHMENTS SUCH AS PUBS
ANDRESTAURANTS SHALL BE FORTY PESOS (P40.00) PER LITER.

EFFECTIVE ON JANUARY 1, 2020, THE TAX ON ALL_ FERMENTED
LIQUORSREGARDLESS IF MANUFACTURED IN FACTORIES OR SOLD AND
BREWED ATMICRO-BREWERIES OR SMALL ESTABLISHMENTS SUCH AS PUBS
ANDRESTAURANTS SHALL BE FORTY FIVE PESOS (P45.00) PER LITER.

EFFECTIVE ON JANUARY 1, 2021, THE TAX ON ALL FERMENTED
LIQUORSREGARDLESS IF MANUFACTURED IN FACTORIES OR SOLD AND
BREWED ATMICRO-BREWERIES OR SMALL ESTABLISHMENTS SUCH AS PUBS
ANDRESTAURANTS SHALL BE FIFTY PESOS (P50.00) PER LITER.

EFFECTIVE ON JANUARY 1, 2022, THE TAX ON ALL FERMENTED
LIQUORSREGARDLESS IF MANUFACTURED IN FACTORIES OR SOLD AND
BREWED ATMICRO-BREWERIES OR SMALL ESTABLISHMENTS SUCH AS PUBS
ANDRESTAURANTS SHALL BE FIFTY FIVE PESOS (P55.00) PER LITER.


The rates of tax imposed under this Section shall be increased by [four percent (4%)]
TENPERCENT (10%) every year thereafter effective on January 1, [2018] 2023,
through revenueregulations issued by the Secretary of Finance. [However, in case of
fermented liquors affectedby the ‘no downward reclassification’ provision prescribed
under this Section, the four percent(4%) increase shall apply to their respective
applicable tax rates.]

[Fermented liquors which are brewed and sold at micro-breweries or small
establishments suchas pubs and restaurants shall be subject to the rate of Twenty-
eight pesos (P28.00) per litereffective on January 1, 2013: Provided, That this rate
shall be increased by four percent (4%)every year thereafter effective on January 1,
2014, through revenue regulations issued by theSecretary of Finance.

Fermented liquors introduced in the domestic market after the effectivity of this Act
shall beinitially tax classified according to their suggested net retail prices.

‘Suggested net retail price’ shall mean the net retail price at which locally
manufactured orimported fermented liquor are intended by the manufacturer or
importer to be sold on retail inmajor supermarkets or retail outlets in Metro Manila for
those marketed nationwide, and in otherregions, for those with regional markets. At
the end of three (3) months from the product launch,the Bureau of Internal Revenue
shall validate the suggested net retail price of the newlyintroduced fermented liquor
against the net retail price as defined herein and initially determinethe correct tax
bracket to which a newly introduced fermented liquor, as defined above, shall
beclassified. After the end of nine (9) months from such validation, the Bureau of
Internal Revenueshall revalidate the initially validated net retail price against the net
retail price as of the time ofrevalidation in order to finally determine the correct tax
bracket to which a newly introducedfermented liquor shall be classified.

‘Net retail price’ shall mean the price at which the fermented liquor is sold on retail in
at leastfive (5) major supermarkets in Metro Manila (for brands of fermented liquor
marketednationally), excluding the amount intended to cover the applicable excise tax
and the value-added tax. For brands which are marketed outside Metro Manila, the ‘net
retail price’ shall meanthe price at which the fermented liquor is sold in at least five (5)
major supermarkets in theregion excluding the amount intended to cover the
applicable excise tax and the value-added tax.

Major supermarkets, as contemplated under this Act, shall be those with the highest
annual grosssales in Metro Manila or the region, as the case may be, as determined by
the National StatisticsOffice, and shall exclude retail outlets or kiosks, convenience or
sari-sari stores, and others of asimilar nature: Provided, That no two (2) supermarkets
in the list to be surveyed are affiliatedand/or branches of each other: Provided, finally,
That in case a particular fermented liquor is notsold in major supermarkets, the price
survey can be conducted in retail outlets where saidfermented liquor is sold in Metro
Manila or the region, as the case may be, upon thedetermination of the Commissioner
of Internal Revenue.


The net retail price shall be determined by the Bureau of Internal Revenue (BIR)
through a pricesurvey under oath.

The methodology and all pertinent documents used in the conduct of the latest price
survey shallbe submitted to the Congressional Oversight Committee on the
Comprehensive Tax ReformProgram created under Republic Act No. 8240.

Understatement of the suggested net retail price by as much as fifteen percent (15%)
of the actualnet retail price shall render the manufacturer or importer liable for
additional excise taxequivalent to the tax due and difference between the understated
suggested net retail price andthe actual net retail price.

Any downward reclassification of present categories, for tax purposes, of fermented
liquors dulyregistered at the time of the effectivity of this Act which will reduce the tax
imposed herein, orthe payment thereof, shall be prohibited.

The proper tax classification of fermented liquors, whether registered before or after
theeffectivity of this Act, shall be determined every two (2) years from the date of the
effectivity ofthis Act.

All fermented liquors existing in the market at the time of the effectivity of this Act
shall beclassified according to the net retail prices and the tax rates provided above
based on the latestprice survey of the fermented liquors conducted by the Bureau of
Internal Revenue.

The methodology and all pertinent documents used in the conduct of the latest price
survey shallbe submitted to the Congressional Oversight Committee on the
Comprehensive Tax ReformProgram created under Republic Act No. 8240.]

Every brewer or importer of fermented liquor shall, within thirty (30) days from the
effectivity ofthis Act, and within the first five (5) days of every month thereafter,
submit to the Commissionera sworn statement of the volume of sales AND REMOVALS
for each particular brand offermented liquor sold at his establishment for the three-
month period immediately preceding.

Any brewer or importer who, in violation of this Section, misdeclares or misrepresents
in his orits sworn statement herein required any pertinent data or information shall,
upon final findingsby the Commissioner that the violation was committed, be penalized
by a summary cancellationor withdrawal of his or its permit to engage in business as
brewer or importer of fermentedliquor.

Any corporation, association or partnership liable for any of the acts or omissions in
violation ofthis Section shall be fined treble the amount of deficiency taxes, surcharges
and interest whichmay be assessed pursuant to this Section.


Any person liable for any of the acts or omissions prohibited under this Section shall
becriminally liable and penalized under Section 254 of this Code. Any person who
willfully aids orabets in the commission of any such act or omission shall be criminally
liable in the samemanner as the principal.

If the offender is not a citizen of the Philippines, he shall be deported immediately after
servingthe sentence, without further proceedings for deportation.

SECTION 2. Implementing Rules and Regulations. - The Secretary of Finance shall,
upon therecommendation of the Commissioner of THE BUREAU OF Internal Revenue,
promulgate thenecessary rules and regulations for the effective implementation of this
Act.

SECTION 3. Repealing Clause. - All laws, decrees, executive orders, rules and
regulations or partsthereof which are contrary to or inconsistent with this Act are
hereby repealed, amended ormodified accordingly.

SECTION 4.£ffectivity. - This Act shall take effect upon its publication either in the
Official Gazetteor in a newspaper of general circulation.

Approved,