FIFTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
Third Regular Session 
) 
SENAJE 
S.No. 
\ii:!49 
Introduced by Senator Miriam Defensor Santiago 
EXPLANATORY NOTE 
The Constitution provides: 
Article 2, Section 15. The State shall protect and promote the right to 
health of the people and instill health consciousness among them. 
Article 2, Section 13. The State recognizes the vital role of the youth in 
nation-building and shall promote and protect their physical, moral, spiritual, 
intellectual, and social well-being. It shall inculcate in the youth patriotism and 
nationalism, and encourage their involvement in public and civic affairs. 
There is an urgent need for reform on excise tax on tobacco and alcohol products to 
achieve the following goals: 
(a) Deter young people from smoking and drinking alcohol, and protect them from the 
lifetime consequences of smoking and alcohol abuse; 
(b) Reduce the consumption of cigarettes and alcohol, thus decreasing the health and 
healthcare costs of tobacco and alcohol use; and 
(c) Finance a universal health care program to improve accessibility to quality health 
care. 
This version of the sin tax bill contains the following reforms: 
(a) Removal of the price classification freeze on cigarettes. The current classification of 
cigarettes is still based from a net retail price survey done in 1996. It's been 16 years 
and prices of cigarettes have definitely increased through the years. 
(b) Unitary tax for all cigarette and alcohol products. The effect of cigarettes and alcohol 
is the same regardless of the price. 
, 
(c) Indexation to the nominal gross domestic product (GDP) growth rate as published by 
the National Statistical Coordination Board (NSCB). Indexation to GDP will keep tax 
I 


rates real and will ensure that tobacco and alcohol products will not become more 
affordable as income increases over time. 
(d) Significant increase in tax rates. This will serve as a deterrent to the young and the 
poor from tobacco use and alcohol drinking. 
( e) Earmarking of incremental revenues to universal health care system to be allocated to 
the following: 
(I) Expansion ofNHIP enrollment and benefit delivery. This provides the poor some 
protection from financial impact of healthcare by improvement in the delivery 
ratio of the NHIP. 
(2) Upgrading of health-care facilities, thus improving access to quality health care 
services. 
(3) Public health programs to include research and development to achieve 
millennium 
development 
goals, 
including 
addressing 
non-communicable 
diseases/lifestyle diseases. 
(4) Periodic review (every 5 years) to modify tax rates to achieve the health and 
revenue objectives of the government as well as to comply with binding 
commitments to the World Health Organization (WHO) Framework Convention 
on TobaccoControl. 
(5) Earmarking of funds (15%) from excise tax on tobacco products under Republic 
Act No. 8240, to be allocated to programs to help tobacco farmers (including 
financing of credit guarantee and crop insurance programs) shift to alternative 
crops other than tobacco and other alternative livelihood; and adjustment 
measures program for prevention of job losses and assistance to displaced 
workers. 
This bill is supported by the Philippine College of Physicians, the Philippine College of 
Chest Physicians, the Philippine Cancer Society, Inc., the Framework Convention on Tobacco 
Control Alliance, Philippines, and the Philippine Society of Gastroenterology. 
j~D*~S~j* 
2 


1 
2 
3 
FIFTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
Third Regular Session 
) 
SEN~T249 
S.No. ___ _ 
Introduced by Senator Miriam Defensor Santiago 
AN ACT 
RESTRUCTURING THE EXCISE TAX 
ON ALCOHOL AND TOBACCO PRODUCTS 
Be it enacted by the Senate and the House of Representatives of the Congress of the 
Philippines in session assembled: 
4 
SECTION 1. Section 141 of the National Internal Revenue Code of 1997, as amended by 
5 
Republic Act No. 9334, is hereby further amended to read as follows: 
6 
"SEC 141. Distilled Spirits. - On distilled spirits, there shall be collected, subject 
7 
to the provisions of Section 133 of this Code, excise taxes IN ACCORDANCE WITH 
8 
ALCOHOL CONTENT as follows: 
9 
10 
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13 
14 
15 
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18 
19 
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21 
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24 
25 
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27 
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(a) 
(b) 
45% ALCOHOL BY VOLUME AND LESS 
January 1,2013 -- P42.00 PER PROOF LITER 
January 1, 2014 -- P80.00 PER PROOF LITER 
Janumy 1,2015 -- P150.00 PER PROOF LITER 
PROVIDED, THAT, ON THE FOURTH YEAR AND 
EVERY YEAR THEREAFTER, THE EXCISE TAX RATES 
PRESCRIBED HEREIN SHALL BE ADJUSTED TO ITS 
PRESENT VALUE USING THE PER CAPITA NOMINAL 
GROSS DOMESTIC PRODUCT (GDP) GROWTH RATE, AS 
PUBLISHED 
BY 
THE 
NATIONAL 
STATISTICAL 
COORDINATION BOARD (NSCB)." 
MORE THAN 45% ALCOHOL BY VOLUME --
January 1,2013 -- P317.45 PER PROOF LITER 
January 1, 2014 -- P233.73 PER PROOF LITER 
January 1, 2015 -- P150.00 PER PROOF LITER 
PROVIDED, THAT, ON THE FOURTH YEAR AND 
EVERY YEAR THEREAFTER, TI-IE EXCISE TAX RATES 
PRESCRIBED HEREIN SHALL BE ADJUSTED TO ITS 
PRESENT VALUE USING THE PER CAPITA NOMINAL 
GROSS DOMESTIC PRODUCT (GDP) GROWTH RATE, AS 
1 


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PUBLISHED 
BY 
THE 
NATIONAL 
STATISTICAL 
COORDINATION BOARD (NSCB)." 
["a) If produced from the sap of nipa, coconut, cassava, camote, or buri palm or 
form 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 (PI 1.65)] 
["b) If produced from raw materials other than those enumerated in the preceding 
paragraph, the tax shall be in accordance with the net retail price per bottle of seven 
hundred fifty milliliter (750 mI.) volume capacity (excluding the excise tax and the value-
added tax) as follows"] 
["(1) Less than two hundred and fifty pesos (P250.00) - One hundred twenty six 
pesos (PI26.00) per proof liter;] 
["(2) Two hundred and fifty pesos (P250.00) up to Six hundred and seventy-five 
pesos (P675.00) - Two hundred fifty-two pesos (P252.00), per proofliter; and] 
["(3) More than Six hundred and seventy-five pesos (P675.00) - Five hundred 
four pesos (P504.00), per proof liter.] 
(c) 
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. 
"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 into 
any other substances either in 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 whatever process produced, and shall include whisky, brandy, rum, gin and 
vodka, and other similar products of mixtures. 
"'Proof Spirits' is liquor containing one-half (112) of its volume of alcohol of a 
specific gravity of seven thousand nine hundred and thirty-nine ten thousandths (0.7939) 
at fifteen degrees centigrade (15°C). A 'proof liter' means a liter of proof spirits. 
['''Net retail price', as determined by the Bureau of Internal Revenue throngh a 
price survey to be conducted by the Bureau ofInternal Revenue itself, or by the National 
Statistics Office when deputized for the purpose by the Bureau of Internal Revenue, shall 
mean the price at which the distilled spirits is sold on retail in at least ten (10) major 
supermarkets in Metro Manila, 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 mean the price at which the distilled spirits is sold in at least 
five (5) major supermarkets in the region excluding the amount intended to cover the 
applicable excise tax and the value-added tax.] 
[" Variants of existing brands and variants of new brands which are introduced in 
the domestic market after the effectively of this Act shall be taxed under the proper 
classification thereof based on their suggested net retail price: Provided, however, that 
such classification shan not, in any case, be lower than the highest classification of any 
variant of that brand.] 
2 


I 
[" A 'variant of a brand' shall refer to a brand on which a modifier is prefixed 
2 
andlor suffixed to the root name of the brand.] 
3 
[" New brands, as defined in the immediately following paragraph, shall initially 
4 
be classified according to their suggested net retail price. Willful understatement of the 
5 
suggested net retail price by as much as fifteen percent (15%) of the actual net retail price 
6 
shall render the manufacturer liable for additional excise tax equivalent to the tax due and 
7 
difference between the understated suggested net retail price and the actual net retail 
8 
price.] 
9 
[" 'New brand' shall mean a brand registered after the date of effectivity of R.A. 
10 
No. 8240.] 
11 
[" 'Suggested net retail price' shall mean the net retail price at which new brands, 
12 
as defined above, oflocally manufactured or imported distilled spirits are intended by the 
13 
manufacturer or importer to be sold on retail in major supermarkets or retail outlets in 
14 
Metro Manila for those marketed nationwide, and in other regions, for those with 
15 
regional markets. At the end of three (3) months from the product launch, the Bureau of 
16 
Internal Revenue shall validate the suggested net retail price as defined herein and 
17 
determine the correct tax bracket to which a particular new brand of distilled spirits, as 
18 
defined above, shall be classified. After the end of eighteen (18) months from such 
19 
validation, the Bureau of Internal Revenue shall revalidate the initially validated net retail 
20 
price against the net retail price of the time of revalidation in order to finally determine 
21 
the correct tax bracket which a particular new brand of distilled spirits shall be classified: 
22 
Provided, however, That brands of distilled spirits introduced in the domestic market 
23 
between January 1, 1997 and December 31, 2003 shall remain in the classification under 
24 
which the Bureau of Internal Revenue has determined them to belong as of December 31, 
25 
2003. Such classification of new brands and brands introduced between January 1, 1997 
26 
and December 31, 2003 shall not be revised except by an act of Congress.] 
27 
[" The rates of tax imposed under this Section shall be increase by eight percent 
28 
(8%) every two years starting on January 1,2007.] 
29 
[" Any downward reclassification of present categories, for tax purposes, of 
30 
existing brands of distilled spirits duly registered at the time of effectivity of this Act 
31 
which will reduce the tax imposed herein, or the payment thereof, shall be prohibited.] 
32 
[" The classification of each brand of distilled spirits based on the average net 
33 
retail price as of October 1, 1996, as set forth in Annex 'A', including the classification 
34 
of brands for the same products which, although not set forth in said Annex 'A', were 
35 
registered and were being commercially produced and marketed on or afier October 1, 
36 
1996, and which continue to be commercially produced and marketed after the effectivity 
37 
of this Act, shall remain in force until revised by Congress.] 
38 
"Manufacturers and importers of distilled spirits shall, within thirty (30) days 
39 
from the effectivity of this Act, and within the first five (5) days of every third month 
40 
thereafter, submit to the Commissioner a sworn statement of the volume of sales for each 
41 
particular brand of distilled of spirits sold at his establishment for the three-month period 
42 
immediately preceding. 
43 
"Any manufacturer or importer who, in violation of this Section, knowingly 
44 
misdeclares or misrepresents in his or its sworn statement herein required any pertinent 
45 
data or information shall, upon final findings by the Commissioner that the violation was 
46 
committed, be penalized by a summary cancellation or withdrawal of his or its permit to 
47 
engage in business as manufacturer or importer of distilled spirits. 
3 


1 
"Any corporation, association or partnership liable for any of the acts or 
2 
omissions in violation of this Section shall be fined treble the amount of deficiency taxes, 
3 
surcharges and interest which may be assessed pursuant to this Section. 
4 
"Any person liable for any of the Acts or omission prohibited under this Section 
5 
shall be criminally liable and penalized under Section 254 of this Code. Any person who 
6 
willfully aids or abets in the commission of any such act or omission shall be criminally 
7 
liable in the same manner as the principal. 
8 
"If the offender is not a citizen of the Philippines, he shall be deported 
9 
immediately after serving the sentence, without further proceedings for deportation. 
10 
SEC. 2. Section 142 of the National Internal Revenue Code of (1997), as amended by 
11 
Republic Act No. 9334, is hereby further amended to read as follows: 
12 
"SEC. 142. Wines. 
- On wines, there shall be collected per liter of volume 
13 
capacity, the following taxes effective January 1,2013: 
14 
"(a) Sparkling wines/champagnes regardless of proof [, if the net retail price per 
15 
bottle (excluding the excise tax and the value-added tax) is:) - THREE HUNDRED 
16 
PESOS (P300.00); 
17 
["(I) Five hundred pesos (P500.00) or less - One hundred forty-five pesos and 
18 
sixty centavos (PI45.60); and) 
19 
["(2) More than Five hundred pesos (P500.00) - Four hundred thirty-six pesos 
20 
and eighty centavos (P436.80») 
21 
["(b) Still wines containing fourteen percent (14%) of alcohol by volume or less, 
22 
Seventeen pesos and forty-seven centavos (PI7.47»); and) 
23 
["( c ) Still Wines containing more than fourteen percent (14%) but not more than 
24 
twenty-five percent (25%) of alcohol by volume, [Thirty-four pesos and ninety-four 
25 
centavos (P34.94).) 
26 
"(b) STILL WINES, REGARDLESS OF PROOF - FIFTY PESOS (P50.00) 
27 
PROVIDED, THAT, EVERY YEAR THEREAFTER, THE EXCISE TAX 
28 
RATES PRESCRIBED HEREIN SHALL BE ADJUSTED TO ITS PRESENT VALUE 
29 
USING THE PER CAPITA NOMINAL GROSS DOMESTIC PRODUCT (GDP) 
30 
GROWTH 
RATE, 
AS 
PUBLISHED 
BY THE NATIONAL 
STATISTICAL 
31 
COORDINATION BOARD (NSCB)." 
32 
"Fortified wines containing more than twenty-five percent (25%) of alcohol by 
33 
volume shall be taxed as distilled spirits. 'Fortified wines' shall mean natural wines to 
34 
which distilled spirits are added to increase their alcohol strength. 
35 
["Net retail price', as determined by the Bureau of Internal Revenue through a 
36 
price survey to be conducted by the Bureau of Internal Revenue itself, or the National 
37 
Statistics Office when deputized for the purpose by the Bureau of Internal Revenue, shall 
38 
mean the price at which wine is sold on retail in at least ten (l0) major supermarkets in 
39 
Metro Manila, excluding the amount intended to cover the applicable excise tax and the 
40 
value-added tax. For brands which are marketed outside Metro Manila, the 'net retail 
41 
price' shall mean the price at which the wine spirits is sold in at least five (5) major 
42 
supermarkets in the region excluding the amount intended to cover the applicable excise 
43 
tax and the value-added tax.] 
4 


" 
1 
["Variants of existing brands and variants of new brands which are introduced in 
2 
the domestic market after the effectivity of this Act shall be taxed under the proper 
3 
classification thereof based on their suggested net retail price: Provided, however, That 
4 
such classification shall not, in any case, be lower than the highest classification of any 
5 
variant of that brand.] 
6 
["A 'variant of a brand' shall refer to a brand on which a modifier is prefixed 
7 
and/or suffixed to the root name of the brand.] 
8 
9 
["New brands, as defined in the immediately following paragraph, shall initially 
10 
be classified according to their suggested retail price."] 
II 
[" 'New brand' shall mean a brand registered after the date of effectivity of R.A. 
12 
No, 8240."] 
13 
[" 'Suggested net retail price' shall mean the net retail price at which new brands, 
14 
as defined above, of locally manufactured or imported wines are intended by the 
15 
manufacture or importer to be sold on retail in major supermarkets or retail outlets in 
16 
Metro Manila for those marketed nationwide, and in other regions, for those with 
17 
regional markets. At the end of three (3) months from the product launch, the Bureau of 
18 
Internal Revenue shall validate the suggested retail price of the new brand against the net 
19 
retail price as defined herein and determine the correct tax bracket under which a 
20 
particular new brand of wine, as defined above, shall be classified, After the end of 
21 
eighteen (18) months from such validation, the Bureau ofInternal Revenue shall validate 
22 
the initially validated net retail price against the net retail price as of the time of 
23 
revalidation in order to finally determine the correct tax bracket which a particular new 
24 
brand of wines shall be classified: Provided, however, That brands of wines introduced in 
25 
the domestic market between January 1, 1997 and December 31, 2003 shall remain in the 
26 
classification under which the Bureau of Internal Revenue has determined them to belong 
27 
as of December 31, 2003, Such classification of new brands and brands introduced 
28 
between January I, 1997 and December 31, 2003 shall not be revised except by any act 
29 
of Congress.] 
30 
[The rates of tax imposed under this Section shall be increased by eight percent 
31 
(8%) every two years starting on January I, 2007 until January 1, 2011.] 
32 
[Any downward reclassification of present categories, for tax purposes, of 
33 
existing brands of wines duly registered at the time of the effectivity of this Act which 
34 
will reduce the tax imposed herein, or the payment hereof, shall be prohibited.] 
35 
[The classification of each brand of wines based on the average net retail price as 
36 
of October 1, 1996, as set forth in Annex 'B', including the classification of brands for 
37 
the same products which, although not set forth in said "Annex B" were registered and 
38 
were being commercially produced and marketed after the effectivity of this Act, shall 
39 
remain in force until revised by Congress,] 
40 
"Manufacturers and importers of wines shall, within thirty (30) days from the 
41 
effectivity of this Act, and within the first five (5) days of every month thereafter, submit 
42 
to the Commissioner a sworn statement of the volume of sales for each particular brand 
43 
of wines sold at his establishment for the three month period immediately preceding, 
44 
"Any manufacturer or importer who, in violation of this Section, knowingly 
45 
misdeclares or misrepresents in his or its sworn statement herein required any pertinent 
46 
data or information shall, upon discovery, be penalized by a summary cancellation or 
47 
withdrawal of his or its permit to engage in business as manufacturer or importer of 
48 
wines, 
5 


I 
"Any corporation, associatIOn or partnership liable for any of the acts or 
2 
omissions in violation of this Section shall be fined treble the amount of deficiency taxes, 
3 
surcharges and interest which may be assessed pursuant to this Section. 
4 
"Any person liable for any of the acts or omissions prohibited under this Section 
5 
shall be criminally liable and penalize under Section 254 of this Code. Any person who 
6 
willfiJlly aids or abets in the commission of any such act or omission shall be criminally 
7 
liable in the same manner as the principal. 
8 
"If the offender is not a citizen of the Philippines, he shall be deported 
9 
immediately after serving the sentence, without further proceedings for deportation. 
10 
SEC. 3. Section 143 of the National Internal Revenue Code of (1997), as amended by 
11 
Republic Act No. 9334, is hereby further amended to read as follows: 
12 
"SEC. 143. Fermented Liquor. - There shall be levied, assessed and collected an 
13 
excise tax on beer, lager beer, ale, porter and other fermented liquors except tuba, basi, 
14 
tapuy and similar fermented liquors [in accordance with the following schedule:] AN 
15 
EXCISE TAX EQUIVALENT TO TWENTY-FIVE PESOS (P25.00) PER LITER 
16 
EFFECTIVE JANUARY 1,2013: PROVIDED, THAT, EVERY YEAR THEREAFTER, 
17 
THE EXCISE TAX RATE PRESCRIBED HEREIN SHALL BE ADJUSTED TO ITS 
18 
PRESENT VALUE USING THE PER CAPITA NOMINAL GROSS DOMESTIC 
19 
PRODUCT (GDP) GROWTH RATE, AS PUBLISHED BY THE NATIONAL 
20 
STATISTICAL COORDINATION BOARD (NSCB)." 
21 
["(a) If the net retail price (excluding the excise tax and the value-added tax) per 
22 
liter of volume capacity is less than Fourteen pesos and fifty centavos (PI4.50), the tax 
23 
shall be Eight pesos and twenty-seven centavos (P8.27) per liter;] 
24 
["(b) If the net retail price (excluding the excise tax and value-added tax) per liter 
25 
of volume capacity is Fourteen pesos and fifty centavos (PI4.50) up to Twenty-two pesos 
26 
(P22.00), the tax shall be Twelve pesos and thirty centavos (PI2.30) per liter;] 
27 
["(c) If the net retail price (excluding the excise tax and the value- added tax) per 
28 
liter of volume capacity is more than Twenty-two pesos (P22.00), the tax shall be Sixteen 
29 
pesos and thirty-three centavos (PI6.33) per liter.] 
30 
["Variants of existing brands and variants of new brands which are introduced in 
31 
the domestic market after the effectivity of this Act shall be taxed under the proper 
32 
classification thereof based on their suggested net retail price: Provided, however, That 
33 
such classification shall not, in any case, be lower than the highest classification of any 
34 
variant of that brand.] 
35 
["A 'variant of a brand' shall refer to a brand on which a modifier is prefixed 
36 
and/or suffixed to the root name of the brand.] 
37 
["Fermented liquors which are brewed and sold at microbreweries or small 
38 
establishments such as pubs and restaurants shall be subject to the rate in paragraph (c) 
39 
hereof.] 
40 
["New brands, as defined in the immediately following paragraph, shall initially 
41 
be classified according to their suggested net retail price.] 
42 
['''New brand' shall mean a brand registered after the date of effectivity of R.A. 
43 
No. 8240.] 
6 


I 
['''Suggested net retail price' shall mean the net retail price at which new brands, 
2 
as defined above, of locally manufactured or imported fermented liquor are intended by 
3 
the manufacturer or importer to be sold on retail in major supermarkets or retail outlets in 
4 
Metro Manila for those marketed nationwide, and in other regions, for those with 
5 
regional markets. At the end of three (3) months from the product launch, the Bureau of 
6 
Internal Revenue shall validate the suggested net retail price of the new brand against the 
7 
net retail price as defined herein and determine the correct tax bracket to which a 
8 
particular new brand of fermented liquor, as defined above, shall be classified. After the 
9 
end of the eighteen (18) months from such validation, the Bureau of Internal Revenue 
10 
shall revalidate the initially validated net retail price against the net retail price as of the 
II 
time of revalidation in order to finally determine the correct tax bracket which a 
12 
particular new brand of fermented liquors shall be classified: Provided, however, That 
13 
brands of fermented liquors introduced in the domestic market between January I, 1997 
14 
and December 31, 2003 shall remain in the classification under which the Bureau of 
IS 
Internal Revenue has determined them to belong as of December 31, 2003. Such 
16 
classification of new brands and brands introduced between January 1, 1997 and 
17 
December 31, 2003 shall not be revised except by an act of Congress.] 
18 
['''Net retail price', as determined by the Bureau of Internal Revenue through a 
19 
price survey to be conducted by the Bureau of Internal Revenue itself, or the National 
20 
Statistics Office when deputized for the purpose of Bureau of Internal Revenue, shall 
21 
mean the price at which the fermented liquor is sold on retail in at least twenty (20) major 
22 
supermarkets in Metro Manila(for brands of fermented liquor marketed nationally), 
23 
excluding the amount intended to cover the applicable excise tax and the value-added tax. 
24 
For brands which are marketed outside Metro Manila, the 'net retail price' shall mean the 
25 
price at which the fermented liquor is sold in at least five (5) major supermarkets in the 
26 
region excluding the amount intended to cover the applicable excise tax and the value-
27 
added tax.] 
28 
["The classification of each brand of fermented liquor based on its average net 
29 
retail price as of October I, 1996, as set forth in Annex 'C', including the classification of 
30 
brands for the same products which, although not set forth in said Annex 'C', were 
31 
registered and were being commercially produced and marketed on or after October I, 
32 
1996, and which continue to be commercially produced and marketed after the effectivity 
33 
of this Act, shall remain in force until revised by Congress.] 
34 
["The rates of tax imposed under this Section shall be increased by eight percent 
35 
(8%) every two years starting on January 1,2007 until January 1, 2011.] 
36 
["Any downward reclassification of present categories, for tax purposes, of 
37 
existing brands of fermented liquor duly registered at the time of the effectivity of this 
38 
Act which will reduce the tax imposed herein, or the payment thereof, shall be 
39 
prohibited.] 
40 
"Every brewer or importer of fermented liquor shall, within thirty (30) days from 
41 
the effectivity of this Act, and within the first five (5) days of every month thereafter, 
42 
submit to the Commissioner a sworn statement of the volume of sales for each particular 
43 
brand of fermented liquor sold at his establishment for the three-month period 
44 
immediately preceding. 
45 
"Any brewer or importer who, in violation of this Section, knowingly misdeclares 
46 
or misrepresents in his or its sworn statement herein required any pertinent data or 
47 
information shall be penalized by a slilllmary cancellation or withdrawal of his or its 
48 
pelmit to engage in business as brewer or importer of felmented liquor. 
7 


1 
"Any corporation, association or partnership liable for any the acts or omissions 
2 
in violation of this Section shall be fined treble the amount of deficiency taxes, 
3 
surcharges and interest which may be assessed pursuant to this Section. 
4 
"Any person, liable for any of the acts or omissions prohibited under this Section 
5 
shall be criminally liable and penalized under Section 254 of this Code. Any person who 
6 
willfully aids or abets in the commission of any such act or omission shall be criminally 
7 
liable in the same manner as the principal. 
8 
"If the offender is not a citizen of the Philippines, he shall be deported 
9 
immediately after serving the sentence, without further proceedings for deportation. 
10 
Sec. 4. Section 144 of the National Internal Revenue Code of (1997), as amended by 
11 
Republic Act No. 9334, is hereby further amended to read as follows: 
12 
"SEC. 144. Tobacco Products. - There shall be collected a tax of [One peso 
13 
(Pl.OO)] TWO PESOS AND FIFTY CENTAVOS (P2.50) on each kilogram of the 
14 
following products of tobacco: 
15 
a) 
Tobacco twisted by hand or reduced into a condition to be consumed in 
16 
any manner other than the ordinary mode of drying and curing; 
17 
b) 
Tobacco prepared or partially prepared with or without the use of any 
18 
machine or instruments or without being pressed or sweetened except as otherwise 
19 
provided hereunder; and 
20 
21 
c) 
Fine-cut shorts and refuse, scraps clippings, cuttings, stems and sweepings 
22 
of tobacco except as otherwise provided hereunder. 
23 
Stemmed leaf tobacco, tobacco prepared or partially prepared with or without the 
24 
use of any machine or instrument or without being pressed or sweetened, fine-cut shorts 
25 
and refuse, scraps, clippings, cuttings, stems, midribs; and sweepings of tobacco resulting 
26 
from the handling or stripping of whole leaf tobacco shall be transfened, disposed of, or 
27 
otherwise sold without any prepayment of the excise tax herein provided for if the same 
28 
are to be exported or to be used in the manufacture of cigars, cigarettes, or other tobacco 
29 
products on which the excise tax will eventually be paid on the finished product, under 
30 
such conditions as may be prescribed in the rules and regulations promulgated by the 
31 
Secretary of Finance, upon recommendation of the Commissioner. 
32 
On tobacco specially prepared for chewing so as to be unsuitable for use in any 
33 
other manner, EFFECTIVE JANUARY 1, 2013, on each kilogram, [Seventy-nine 
34 
centavos (PO.79)] ONE PESO AND EIGHTY-SEVEN CENTAVOS (P1.87). 
35 
["The rates of tax imposed under this Section shall be increased by six percent 
36 
(6%) every two years starting on January 1,2007 until January 1,2011."] 
37 
PROVIDED, 
THAT ON 
JANUARY 
1, 
2014 
AND 
EVERY YEAR 
38 
THEREAFTER, THE EXCISE TAX RATES PRESCRIBED HEREIN SHALL BE 
39 
ADJUSTED ANNUALLY TO THEIR PRESENT VALUE USING THE PER CAPITA 
40 
NOMINAL 
GROSS 
DOMESTIC PRODUCT (GDP) 
GROWTH RATE, 
AS 
41 
PUBLISHED BY THE NATIONAL STATISTICAL COORDINATION BOARD 
42 
(NSCB)." 
43 
Manufacturers and importers of tobacco products shall, within thirty (30) days 
44 
from the effectivity of this Act, and within the first five (5) days of every month 
45 
thereafter, submit to the Commissioner a sworn statement of the volume of sales for each 
8 


I 
particular brand of tobacco products sold [at their establishment) for the three-month 
2 
period immediately preceding. 
3 
Any manufacturer or importer who, in violation of this Section, knowingly 
4 
misdeclares and misrepresents in his or its sworn statement herein required any pertinent 
5 
data or information shall, upon discovery, be penalized by a summary cancellation or 
6 
withdrawal of his or its permit to engage in business as manufacturer or importer of cigar 
7 
and cigarettes. 
8 
Any corporation, association or partnership liable for any of the acts or omissions 
9 
in violation of this Section shall be fined treble the amount of deficiency taxes, 
10 
surcharges and interest which may be assessed pursuant to this Section. 
11 
Any person liable for any of the acts or omission prohibited under this Section 
12 
shall be criminally liable and penalized under Section 254 of this Code. Any person who 
13 
willfully aids or abets in the commission of any such act or omission shall be criminally 
14 
liable in the same manner as the principal. 
15 
If the offender is not a citizen of the Philippines, he shall be deported immediately 
16 
after serving the sentence, without further proceedings for deportation. 
17 
Sec. 5. Section 145 of the National Internal Revenue Code of 1997, as amended by 
18 
Republic Act No. 9334, is hereby further amended to read as follows: 
19 
"SEC. 145. Cigars and Cigarettes. 
20 
A) 
Cigars. - There shall be levied, assessed and collected on cigars [an ad 
21 
valorem tax based on the retail price) A TAX OF TWO HUNDRED PESOS 
22 
(P200.00) per cigar. 
[(excluding the excise tax and the value-added tax) in 
23 
accordance with the following schedule:) 
24 
["1) If the net retail price per cigar is Five hundred pesos, (P500.00) or 
25 
less, ten percent (10%); and) 
26 
["2) If the net retail price per cigar is (excluding the excise tax and the 
27 
value-added tax) is more than Five hundred pesos (P500.00), Fifty pesos 
28 
(P50.00) plus fifteen percent (15%) of the net retail price in excess ofFive 
29 
hundred pesos (P500.00).") 
30 
PROVIDED, 
THAT ON 
JANUARY 
I, 
2014 
AND 
EVERY 
YEAR 
31 
THEREAFTER, THE EXCISE TAX RATE PRESCRIBED HEREIN SHALL BE 
32 
ADJUSTED ANNUALLY TO ITS PRESENT VALUE USING THE PER CAPITA 
33 
NOMINAL 
GROSS 
DOMESTIC PRODUCT (GDP) 
GROWTH RATE, 
AS 
34 
PUBLISHED BY THE NATIONAL STATISTICAL COORDINATION BOARD 
35 
(NSCB)." 
36 
(B) Cigarettes Packed by Hand. - There shall be levied, assessed and collected on 
3 7 
cigarettes packed by hand a tax at the rates prescribed below: 
38 
EFFECTIVE ON JANUARY I, 2013, FOURTEEN PESOS (PI4.00) PER 
39 
PACK; 
40 
EFFECTIVE ON JANUARY I, 2014, TWENTY TWO PESOS (P22.00) PER 
41 
PACK; 
42 
EFFECTIVE ON JANUARY 1, 2015, THIRTY PESOS (P30.00) PER PACK. 
9 


1 
"PROVIDED, 
THAT ON JANUARY 
1, 2016 AND EVERY YEAR 
2 
THERAFTER, THE EXCISE TAX RATE PRESCRIBED HEREIN SHALL BE 
3 
ADJUSTED ANNUALLY TO ITS PRESENT VALUE USING THE PER 
4 
CAPITA NOMINAL GROSS DOMESTIC PRODUCT (GDP) GROWTH 
5 
RATE, 
AS 
PUBLISHED 
BY 
THE 
NATIONAL 
STATISTICAL 
6 
COORDINATION BOARD (NSCB)." 
7 
Duly registered or existing brands of cigarettes or new brands thereof packed by 
8 
hand shall only be packed in thirties. ANY BRAND NOT PACKED IN 
9 
THIRTIES SHALL BE PROHIBITED AND SUBJECTED TO PENALTIES 
10 
PROVIDED UNDER THIS ACT, WITHOUT PREJUDICE TO OTHER 
11 
ADMINISTRATIVE OR CRIMINAL PENALTIES THAT MAY BE IMPOSED 
12 
ON THE MANUFACTURER, IMPORTER AND DISTRIBUTOR OF THE 
13 
SAID BRAND. 
14 
["Effective on January 1,2005, Two pesos (P2.00) per pack;] 
15 
["Effective on Jannary 1,2007, Two Pesos and twenty-three centavos (P2.23) Per 
16 
Pack;] 
17 
[Effective on January 1, 2009, Two pesos and forty-seven centavos (P2.47) per 
18 
pack; and] 
19 
[Effective on January 1,2011, Two pesos and seventy-two centavos (P2.72) per 
20 
pack.] 
21 
(C) Cigarettes Packed by Machine. - There shall be levied, assessed and collected 
22 
on cigarettes packed by machine a tax at the rates prescribed below: 
23 
EFFECTIVE ON JANUARY 1,2013-
24 
(I) IF THE NET RETAIL PRICE (EXCLUDING THE EXCISE TAX 
25 
AND THE VALUE-ADDED TAX) IS TEN PESOS (PIO.OO) AND 
26 
BELOW PER PACK, THE TAX SHALL BE FOURTEEN PESOS 
27 
(14.00) PER PACK; 
28 
(2) IF THE NET RETAIL PRICE (EXCLUDING THE EXCISE TAX 
29 
AND THE VALUE-ADDED TAX) IS MORE THAN TEN PESOS 
30 
(PI0.00) PER PACK, THE TAX SHALL BE THIRTY PESOS 
31 
(P30.00) PER PACK; 
32 
EFFECTIVE ON JANUARY 1,2014-
33 
34 
35 
36 
37 
38 
39 
40 
(1) 
IF THE NET RETAIL PRICE (EXCLUDING THE EXCISE TAX 
AND THE VALUE-ADDED TAX) IS TEN PESOS (PIO.OO) 
AND BELOW PER PACK, THE TAX SHALL BE TWENTY-
TWO PESOS (P22.00) PER PACK; 
(2) 
IF THE NET RETAIL PRICE (EXCLUDING THE EXCISE TAX 
AND THE VALUE-ADDED TAX) IS MORE THAN TEN 
PESOS (PIO.OO) PER PACK, THE TAX SHALL BE THIRTY 
PESOS (P30.00) PER PACK; 
10 


I 
EFFECTIVE ON JANUARY 1, 2015, THE TAX SHALL BE 
2 
THIRTY PESOS (P30.00) PER PACK; 
3 
PROVIDED, 
THAT ON 
JANUARY 
I, 2016 
AND 
EVERY YEAR 
4 
THEREAFTER, THE EXCISE TAX RATE PRESCRIBED HEREIN SHALL BE 
5 
ADJUSTED ANNUALLY TO ITS PRESENT VALUE USING THE PER 
6 
CAPITA NOMINAL GROSS DOMESTIC PRODUCT (GDP) GROWTH 
7 
RATE, 
AS 
PUBLISHED 
BY 
THE 
NATIONAL 
STATISTICAL 
8 
COORDINATION BOARD (NSCB)." 
9 
ALL BRANDS OF CIGARETTES EXISTING IN THE MARKET AT THE 
10 
TIME OF THE EFFECTIVITY OF THIS ACT SHALL BE CLASSIFIED 
11 
ACCORDINGLY FOR THE PROPER DETERMINATION OF THE TAX 
12 
LIABILITY IN ACCORDANCE WITH THE SCHEDULE PROVIDED 
13 
ABOVE. 
14 
["(I) If the net retail price (excluding the excise tax and the value-added tax) is 
IS 
below Five pesos (PS.OO) per pack, the tax shall be:] 
16 
["Effective on January 1, 200S, Two pesos (P2.00) per pack; 
17 
["Effective on January 1, 2007, Two pesos and twenty-three centavos (P2.23) per 
18 
pack;] 
19 
["Effective on January I, 2009, Two pesos and forty-seven centavos (P2.47) per 
20 
pack; and] 
21 
["Effective on January 1,2011, Two pesos and seventy-two centavos (P2.72) per 
22 
pack.] 
23 
["(2) If the net retail price (excluding the excise tax and the value-added tax) is 
24 
Five pesos (PS.OO) but does not exceed Six pesos and fifty centavos (P6.S0) per pack, the 
25 
tax shall be: 
26 
["Effective on January 1, 200S, Six pesos and thirty-five centavos (P6,3S) per 
27 
pack;] 
28 
["Effective on January I, 2007, Six pesos and seventy-four centavos (P6.74) per 
29 
pack;] 
30 
["Effective on January 1,2009, Seven pesos and fourteen centavos (P7.14) per 
31 
pack; and] 
32 
["Effective on January 1,2011, Seven pesos and fifty-six centavos (P7.56) per 
33 
pack.] 
34 
["(3) If the net retail price (excluding the excise tax and the value-added tax) 
3S 
exceeds Six pesos and fifty centavos (P6.S0) but does not exceed Ten pesos (PIO.OO) per 
36 
pack, the tax shall be:] 
37 
["Effective on January I, 200S, Ten pesos and thirty-five centavos (PIO.3S) per 
38 
pack;] 
39 
["Effective on January I, 2007, Ten pesos and eighty-eight centavos (PI 0.88) per 
40 
pack;] 
II 


1 
["Effective on January 1, 2009, Eleven pesos and forty-three centavos (PI 1.43) 
2 
per pack and;] 
3 
["Effective on January 1,2011, Twelve pesos (PI2.00) per pack.] 
4 
["(4) If the net retail price (excluding the excise tax and the value-added tax) is 
5 
above Ten pesos (PI 0.00) per pack, the tax shall be:] 
6 
["Effective on January 1,2005, Twenty-five pesos (P25.00) per pack;] 
7 
["Effective on January I, 2007, Twenty-six pesos and six centavos (P26.06 per 
8 
pack;] 
9 
["Effective on January 1, 2009, Twenty-seven pesos and sixteen centavos 
10 
(P27 .16) per pack; and] 
11 
["Effective on January 1,2011, Twenty-eight pesos and thirty centavos (P28.30) 
12 
per pack.] 
13 
Variants of existing brands and variants of new brands of cigarettes which are 
14 
introduced in the domestic market after the effectivity of this Act shall be taxed under the 
15 
proper classification thereof based on their suggested net retail price: Provided, however, 
16 
that such classification shall not, in any case, be lower than the highest classification of 
17 
any variant of that brand. 
18 
A 'variant of a brand' shall refer to a brand on which a modifier is prefixed 
19 
and/or suffixed to the root name of the brand. 
20 
Duly registered or existing brands of cigarettes or new brands thereof packed by 
21 
machine shall only be packed in twenties. ANY BRAND NOT PACKED IN TWENTIES 
22 
SHALL BE PROHIBITED AND SUBJECTED TO PENALTIES PROVIDED UNDER 
23 
THIS ACT, WID-lOUT PREJUDICE TO OTHER ADMINISTRATIVE OR CRIMINAL 
24 
PENALTIES THAT MAY BE IMPOSED ON THE MANUFACTURER, IMPORTER 
25 
AND DISTRIBUTOR OF THE SAID BRAND. 
26 
Any downward reclassification of present categories, for tax purposes, of existing 
27 
brands of cigars and cigarettes duly registered at the time of the effectivity of this Act 
28 
which will reduce the tax imposed herein, or the payment thereof, shall be prohibited. 
29 
"New brands as defined in the immediately following paragraph, shall initially be 
30 
classified according to their suggested net retail price. 
31 
32 
'''New brand" shall mean a brand registered after the date of effectivity of [R.A 
33 
No. 8240] TI-IIS ACT. 
34 
" 'Suggested net retail price' shall mean the net retail price at which new brands, 
35 
as defined above, of locally manufactured or imported cigarettes are intended by the 
36 
manufacturer or importer to be sold on retail in major supermarkets or retail outlets in 
37 
Metro Manila for those marketed nationwide, and in other regions, for those with 
38 
regional markets. At the end of three (3) months from the product launch, the Bureau of 
39 
Internal Revenue shall validate the suggested net retail price of the new brand against the 
40 
net retail price as defined herein and determine the correct tax bracket under which a 
41 
particular new brand of cigarette, as defined above, shall be classified. After the end of 
42 
eighteen (18) months 
from such validation, the Bureau of Internal Revenue shall 
43 
revalidate the initially validated net retail price against the net retail price as of the time 
44 
of revalidation in order to finally determine the correct tax bracket under which a 
12 


I 
palticular new brand of cigarettes shall be classified. [: Provided, however, That brands 
2 
of cigarettes introduced in the domestic market between January I, 1997 and December 
3 
31, 2003 shall remain in the classification under which the Bureau of Internal Revenue 
4 
has determined them to belong as of December 31, 2003. Such classification of new 
5 
brands and brands introduced between January I, 1997 and December 31, 2003 shall not 
6 
be revised except by an act of Congress.] 
7 
'Net retail price', as determined by the Bureau of Internal Revenue through a 
8 
price survey to be conducted by THE NATIONAL STATISTICS OFFICE [the Bureau of 
9 
Internal Revenue itself, or the National Statistics Office when deputized for the purpose 
10 
by the Bureau of Internal Revenue], shall mean the price at which the cigarette is sold on 
II 
retail in at least twenty (20) major supermarkets in Metro Manila (for brands of cigarettes 
12 
marketed nationally), excluding the amount intended to cover the applicable excise tax 
13 
and value-added tax. For brands which are marketed only outside Metro Manila, the 'net 
14 
retail price', shall mean the price at which the cigarette is sold in at least five (5) major 
IS 
supermarkets in the region excluding the amount intended to cover the applicable excise 
16 
tax and the value-added tax. THE MAJOR SUPERMARKETS SHALL BE THOSE 
17 
WITH THE HIGHEST TOTAL GROSS SALES IN METRO MANILA OR THE 
18 
REGION, AS THE CASE MAY BE, AS DETERMINED BY THE NATIONAL 
19 
STATISTICS OFFICE. 
20 
["The classification of each brand of cigarettes based on the average net retail 
21 
price as of October 1,1996, as set forth in the Annex 'D', including the classification of 
22 
brands for the same products which, although not set forth in said Annex 'D', were 
23 
registered and were being commercially produced and marketed on or after October I, 
24 
1996, and which continue to be commercially produced and marketed after the 
25 
effectively of this Act, shall remain in force until revised by Congress.] 
26 
Manufacturers and importers of cigars and cigarettes shall, within thirty (30) days 
27 
from the effectivity of this Act, and within the first five (5) days of every month 
28 
thereafter, submit to the Commissioner a sworn statement of the volume of sales for each 
29 
pariicular brand of cigars andlor cigarettes sold [at his establishment] for the three-month 
30 
period immediately preceding. 
31 
Any manufacturer or importer who, in violation of this Section, knowingly 
32 
misdeclares or misrepresents in his or its sworn statement herein required any pertinent 
33 
data or information shall, upon discovery, be penalized by a summary cancellation or 
34 
withdrawal of his or its permit to engage in business as manufacturer or importer of 
35 
cigars or cigarettes. 
36 
Any corporation, association or partnership liable for any of the acts or omissions 
37 
in violation of this Section shall be fined treble the aggregate amount of deficiency taxes, 
38 
surcharges and interest which may be assessed pursuant to this Section. 
39 
Any person liable for any of the acts or omission prohibited under this Section 
40 
shall be criminally liable and penalized under Section 254 of this Code. Any person who 
41 
willfully aids or abets in the commission of any such act or omission shall be criminally 
42 
liable in the same manner as the principal. 
43 
If the offender is not a citizen of the Philippines, he shall be deported immediately 
44 
after serving the sentence, without further proceedings for deportation." 
45 
Section 6. Section 131, Subsection A of the National Internal Revenue Code of 1997, as 
46 
amended by Republic Act No. 9334, is hereby fwther amended as follows: 
47 
"SEC. 131. Payment of Excise Taxes on Imported Articles. -
13 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
(A) 
x x x 
(B) 
xxx 
The provision of any special or general law to the contrary notwithstanding, the 
importation of cigars and cigarettes, distilled spirits, fermented liquors and wines 
into the Philippines, even if destined for tax and duty-free shops, shall be subject 
(0 all applicable taxes, duties, charges, including excise taxes due thereon. This 
shall apply to cigars and cigarettes, distilled spirits, fermented liquors and wines 
brought directly into the duly chartered or legislated freeports of the Subic Special 
Economic and Freeport Zone, created under Republic Act No. 7227; the Cagayan 
Special Economic Zone and Freeport, created under the Republic Ac( No. 7922; 
aIid the Z=boanga City Special Economic Zone, created Republic Act No. 
7903, and such other freeports as may hereafter be established or created by law; 
Provided, further, 
that NOTWITHSTANDING THE PROVISIONS 
OF 
REPUBLIC ACTS 9400 AND 9593, importations of cigars and 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 applicable duties only; x x x 
xxx 
Articles 
confiscated 
shall 
be 
DESTROYED 
USING 
THE 
MOST 
ENVIRONMENT ALL Y FRIENDLY METHOD AVAILABLE. [disposed of in 
accordance with the rules and regulations to be promulgated by the Secretary of 
Finance, upon recommendation of the Commissioners of Customs and Internal 
Revenue, upon consultation with the Secretary of Tourism and General-manager 
of the Philippine Tourism Authority.] 
xxx 
xxx 
25 
Section 7. Section 288, subsections band c of the National Internal Revenue Code of 
26 
1997, as amended by Republic Act No. 9334, is hereby further amended to read as follows: 
27 
"(B) Incremental Revenues from Republic Act No. 8240. - Fifteen percent (15%) of the 
28 
incremental revenue collected from the excise tax on tobacco products under R.A. No. 
29 
8240 shall be allocated AS FOLLOWS: [and divided among the provinces producing 
30 
burley and native tobacco in accordance with the volume of tobacco leaf production. The 
31 
fund shall be exclusively utilized for programs in pursuit of the following objectives] 
32 
33 
34 
35 
36 
37 
38 
39 
40 
41 
(1) 
A PORTION SHALL BE DIVIDED AMONG THE PROVINCES PRODUCING 
BURLEY AND NATIVE TOBACCO, IN ACCORDANCE WITH THE 
VOLUME OF TOBACCO LEAF PRODUCTION, THE AMOUNT OF WHICH 
SHALL BE DETERMINED BY THE DEPARTMENT OF AGRICULTURE. 
THE FUND SHALL BE EXCLUSIVELY UTILIZED FOR PROGRAMS TO 
PROMOTE ECONOMICALLY VIABLE ALTERNATIVES FOR TOBACCO 
FARMERS AND WORKERS SUCH AS: 
a. PROGRAMS THAT WILL PROVIDE INPUTS, TRAINING, AND OTHER 
SUPPORT FOR TOBACCO FARMERS WHO SHIFT TO PRODUCTION 
OF AGRICULTURAL PRODUCTS OTHER THAN TOBACCO. 
14 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
(2) 
b. PROGRAMS THAT WILL PROVIDE FINANCIAL SUPPORT FOR 
TOBACCO FARMERS WHO ARE DISPLACED OR WHO CEASE TO 
PRODUCE TOBACCO VOLUNTARILY. 
c. COOPERATIVE PROGRAMS TO ASSIST TOBACCO FARMERS IN 
PLANTING ALTERNATIVE CROPS OR IMPLEMENTING OTHER 
LIVELIHOOD PROJECTS. 
d. PROGRAMS TO EXTEND CREDIT GUARANTEE ASSISTANCE TO 
FARMERS WHO SHIFT TO PRODUCTION OF AGRICULTURAL 
PRODUCTS OTHER THAN TOBACCO. 
e. PROGRAMS 
TO 
PROVIDE 
INSURANCE 
PROTECTION 
TO 
AGRICULTURAL PRODUCERS WHO WILL SHIFT TO PRODUCTION 
OF CROPS OTHER THAN TOBACCO. 
A PORTION SHALL BE USED TO AUGMENT FINANCING FOR THE 
ADJUSTMENT MEASURES PROGRAM FOR THE PREVENTION OF .JOB 
LOSSES AND ASSISTANCE TO DISPLACED WORKERS, THE AMOUNT 
OF WHICH SHALL BE COMPUTED ON THE BASIS OF THE ANNUAL 
REQUIREMENT OF THE SAID PROGRAM AS DETERMINED BY THE 
DEPARTMENT OF LABOR AND EMPLOYMENT. 
19 
["(1) Cooperative projects that will enhance better quality of agricultural products mld 
20 
increase income and productivity of farmers;"] 
21 
["(2) Livelihood projects, particularly the development of alternative farming system to 
22 
enhance farmer's income; and] 
23 
["(3) Agro-industrial projects that will enable tobacco farmers to be involved in the 
24 
management and subsequent ownership of projects, such as post-harvest and secondary 
25 
processing like cigarette mmmfacturing and by-product utilization.] 
26 
"The Department of Budget and Management, in consultation with the DEPARTMENT 
27 
OF AGRICULTURE AND THE DEPARTMENT OF LABOR AND EMPLOYMENT 
28 
[Oversight Committee created under said R.A. No. 8240], shall issue [the corresponding] 
29 
rules and regulations governing the allocation and disbursement of this fund, NOT 
30 
LATER THAN ONE HUNDRED EIGHTY (180) DAYS FROM THE EFFECTIVITY 
31 
OF THIS ACT. 
32 
(C) 
Incremental Revenues from the Excise Tax on Alcohol and Tobacco Products.-
33 
[(1) Two and a half percent (2.5%) of the incremental revenue from the excise tax on 
34 
alcohol and tobacco products starling January 2005 shall be remitted directly to the 
35 
Philippine Health Insurance Corporation for the purpose of meeting ffild sustaining the 
36 
goal of universal coverage of the National Health Insurffilce Program; and] 
37 
[(2) Two and a half percent (2.5%) of the incremental revenue from the excise tax on 
38 
alcohol ffild tobacco products starting January 2005 shall be credited to the account of the 
39 
Department of Health and constituted as a trust fund for its disease prevention program.] 
40 
["The earmarking provided under this provision shall be observed for five (5) years 
41 
staliing from JanualY 2005. "J 
42 
"THE 
REMAINING 
BALANCE 
OF 
THE 
INCREMENTAL 
REVENUES 
43 
COLLECTED FROM THE EXCISE TAXES ON ALCOHOL AND TOBACCO 
44 
PRODUCTS FROM THIS ACT SHALL BE ALLOCATED TO FINANCE THE 
15 


1 
UNIVERSAL I-lEAL TH CARE PROGRAM, THE AMOUNT OF WHICH SHALL BE 
2 
COMPUTED ON THE BASIS OF THE ANNUAL REQUIREMENT OF THE SAID 
3 
PROGRAM AS DETERMINED BY THE DEPARTMENT OF HEALTH. THE FUND 
4 
SHALL BE USED EXCLUSIVELY FOR THE FOLLOWING MEASURES IN 
5 
PURSUANCE OF THE UNIVERSAL HEALTH CARE PROGRAM OF THE 
6 
GOVERNMENT: 
7 
8 
A.) FINANCIAL RISK PROTECTION THROUGH EXPANSION IN NHIP 
9 
ENROLLMENT AND BENEFIT DELIVERY - THE POOR ARE TO BE 
10 
PROTECTED FROM THE FINANCIAL IMPACTS OF HEALTH CARE USE 
11 
BY IMPROVING THE BENEFIT DELIVERY RATIO OF THE NATIONAL 
12 
HEALTH INSURANCE PROGRAM (NHIP); 
13 
B.) IMPROVED ACCESS TO QUALITY HOSPITALS AND HEALTH CARE 
14 
FACILITIES -
GOVERNMENT OWNED AND OPERATED HOSPITALS 
15 
AND 
HEALTH 
FACILITIES 
WILL 
BE 
UPGRADED 
TO 
EXPAND 
16 
CAPACITY AND PROVIDE QUALITY SERVICES TO HELP ATTAIN 
17 
MDGS, ATTEND TO TRAUMATIC INJURIES AND OTHER TYPES OF 
18 
EMERGENCIES, AND MANAGE NON-COMMUNICABLE DISEASES AND 
19 
THEIR COMPLICATIONS; 
20 
C.) 
ATTAINMENT 
OF 
THE 
HEALTH-RELATED 
MILLENNIUM 
21 
DEVELOPMENT GOALS (MDGs) - PUBLIC HEALTH PROGRAMS SHALL 
22 
BE FOCUSED ON REDUCING MATERNAL AND CHILD MORTALITY, 
23 
MORBIDITY AND MORTALITY FROM TB AND MALARIA, AND THE 
24 
PREVALENCE OF HIV/AIDS, IN ADDITION TO BEING PREPARED FOR 
25 
EMERGING DISEASE TRENDS, AND PREVENTION AND CONTROL OF 
26 
NON-COMMUNICABLE DISEASES." 
27 
SECTION 8. 
ANNUAL REPORT- THE DEPARTMENT OF BUDGET AND 
28 
MANAGEMENT, THE DEPARTMENT OF AGRICULTURE, THE PHILIPPINE HEALTH 
29 
INSURANCE CORPORATION, AND THE DEPARTMENT OF HEALTH SHALL EACH 
30 
SUBMIT TO THE OVERSIGHT COMMITTEE CREATED UNDER R.A. 8240 A DETAILED 
31 
REPORT ON THE EXPENDITURE OF THE AMOUNTS EARMARKED THIS SECTION, 
32 
ON THE FIRST WEEK OF AUGUST OF EVERY YEAR. THE REPORTS SHALL BE 
33 
SIMULTANEOUSLY PUBLISHED IN THE OFFICIAL GAZETTE AND THE AGENCIES' 
34 
WEBSITES. 
35 
SECTION 9. OVERSIGHT COMMITTEE -
THE COMPOSITION OF THE 
36 
OVERSIGHT COMMITTEE CREATED UNDER R.A. 8240 SHALL INCLUDE THE 
37 
AGRICULTURE AND HEALTI-I COMMITTEE CHAIRPERSONS OF THE SENATE AND 
38 
THE HOUSE OF REPRESENTATIVES, AS PART OF THE FOUR (4) MEMBERS TO BE 
39 . APPOINTED FROM EACH HOUSE. 
40 
UPON RECEIPT OF THE AGENCIES' ANNUAL REPORTS, THE COMMITTEE 
41 
SHALL REVIEW TI-IEM AND ENSURE THE PROPER IMPLEMENTATION OF THIS ACT 
42 
AS REGARDS THE EXPENDITURES OF THE EARMARKED FUNDS. 
43 
SECTION 10. REVIEW OF TAX RATES UNDER THIS ACT - WITHIN 30 DAYS 
44 
FROM THE OPENING OF CONGRESS REGULAR SESSION IN 2017, AND EVERY FIVE 
45 
(5) YEARS THEREAFTER, AN INTER-AGENCY COMMITTEE SHALL SUBMIT TO THE 
46 
CHAIRPERSONS OF THE HOUSE AND SENATE COMITTEES ON WAYS AND MEANS 
47 
AS WELL AS HEALTH, A STUDY ON WHETHER OR NOT A MODIFICATION OF THE 
48 
TAX RATES UNDER THIS ACT IS IN ORDER, TAKING INTO CONSIDERATION THE 
49 
HEALTH AND REVENUE OBJECTIVES OF THE GOVERNMENT, AS WELL AS ITS 
50 
COMPLIANCE WITI-I THE RELEVANT PROVISIONS OF THE WORLD HEALTH 
51 
ORGANIZATION FRAMEWORK CONVENTION ON TOBACCO CONTROL. THE 
16 


1 
COMMITTEE SHALL BE COMPOSED OF THREE (3) REPRESENTATIVES EACH FROM 
2 
THE DEPARTMENT OF HEALTH AND THE DEPARTMENT OF FINANCE AS 
3 
MEMBERS, AND THE SECRETARY OF HEALTH AND SECRETARY OF FINANCE AS 
4 
JOINT CHAIRPERSONS. 
5 
SECTION 11. Implementing Rules and Regulations. - The Secretary of Finance shall, 
6 
upon the recommendation of the Commissioner of Internal Revenue, [and in consultation with 
7 
the Department of Health,] promulgate the necessary rules and regulations for the effective 
8 
implementation of this Act, NOT LATER THAN ONE HUNDRED EIGHTY (180) DAYS 
9 
UPON THE EFFECTIVITY OF THIS ACT. THE RULES AND REGULATIONS TO BE 
10 
PROMULGATED UNDER SECTION 6 HEREOF SHALL FORM AN INTEGRAL PART OF 
11 
THE IMPLEMENTING RULES AND REGULATIONS. 
12 
SECTION 12. Separability Clause. - If any of the provisions of this Act is declared 
13 
invalid by a competent court, the remainder of this Act or any provision not affected by such 
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declaration of invalidity shall remain in force and effect. 
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SECTION 13. Repealing Clause. - All laws, decrees, ordinances, rules and regulations, 
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executive Of administrative orders, and such other presidential issuances that are inconsistent 
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with any of the provisions of this Act are hereby repealed, amended or otherwise modified 
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accordingly. 
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SECTION 14. Effectivity. - This Act shall take effect on 1 January 2013. 
Approved, 
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