Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
First Regular Session

House BillNo.__ 2484

Introduced by REP. ERICO B. AUMENTADO

AN ACT

PROVIDING FOR AN ADDITIONAL EXCISE TAX OF TEN PERCENT (10%) ON
ALCOHOL PRODUCTS, AMENDING FOR THE PURPOSE THE NATIONAL
INTERNAL REVENUE CODE OF 1997, AS AMENDED BY R.A. 9334, TO GENERATE
FUNDS FOR THE INFORMATION COMMUNICATION TECHNOLOGY (ICT)
PROGRAM OF PUBLIC ELEMENTARY AND SECONDARY SCHOOLS AND
CONSTRUCTION OF NEW SCHOOL BUILDINGS, HIRING OF NEW TEACHERS
PREFERABLY WITH ICT PROFICIENCY, ENGLISH, MATH AND SCIENCE MAJORS,
AND FOR OTHER PURPOSES:

EXPLANATORY NOTE

Excessive liquor drinking has been identified as one of the causes of the deadly cancer
and tuberculosis.

The diseases attributed to alcoholic drinking together with the impact on the drinkers’
finances necessitated the stronger regulation to curb excessive alcoholic drinking.

The calibrated increase of excise tax on alcohol products, notwithstanding, the number
of excessive alcoholics continue to grow. This group includes minors, students, jobless
and those classified as poor and even indigents.

To discourage the minors, students, the jobless, and those below the poverty line from
abusive alcoholic drinking, this bill seeks to increase by ten percent (10%) the excise
tax on alcoholic products effective January 1, 2012

The amount generated from such taxation shall be spent exclusively to generate funds
for the information communication technology (ICT) program of public elementary and
secondary schools, as well as the construction of new buildings and the employment of
new teachers, preferably with ICT proficiency, English, Math and Science majors.

Wherefore, early approval of this bill is most respectfully prayed of this Honorable
House of Representatives.



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
First Regular Session

House BillNo.__ 2484

Introduced by REP. ERICO B. AUMENTADO.

qzalt

AN ACT si
PROVIDING FOR AN ADDITIONAL EXCISE TAX OF TEN PERCENT (10%) ON
ALCOHOL PRODUCTS, AMENDING FOR THE PURPOS! HE NATIONAL
INTERNAL REVENUE CODE OF 1997, AS AMENDED BY R.A. , TO GENERATE
FUNDS FOR THE INFORMATION COMMUNICATION TECHNOLOGY (ICT)
PROGRAM OF PUBLIC ELEMENTARY AND SECONDARY SCHOOLS AND
CONSTRUCTION OF NEW SCHOOL BUILDINGS, HIRING OF NEW TEACHERS
PREFERABLY WITH ICT PROFICIENCY, ENGLISH, MATH AND SCIENCE MAJORS,
AND FOR OTHER PURPOSES.

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

Section 1 Section 141 of the National Internal Revenue Code of 1997 — as amended
by R.A. 9334, is hereby further amended by insertion 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:

"(a) If produced from the sap of nipa, coconut, cassava, camote, or buri
palm or from 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);

"(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 ml.) 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 (P126.00), 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 proof
liter; and

"(3) More than Six hundred and seventy five pesos (P675.00) -Five
hundred four pesos (P504.00), per proof liter.

"(©) 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 substance 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 or mixtures.

"Proof spirits’ is liquor containing one-half (1/2) of its volume of alcohol of
a specific gravity of seven thousand nine hundred and thirty-nine ten thousandths
(0.7938) at fifteen degrees centigrade (150C). A ‘proof liter’ means a liter of proof
spirits.

“Net retail price’, as determined by the Bureau of Internal Revenue
through a price survey to be conducted by the Bureau of Internal 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 effectivity of this Act shall be taxed
under the proper classification thereof based on their suggested net retail price:
Provided, however, That such classification shall not, in any case, be lower than
the highest classification of any variant of that brand.

“A ‘variant of a brand’ shall refer to a brand on which a modifier is prefixed
and/or suffixed to the root name of the brand.

"New brands, as defined in the immediately following paragraph, shall
initially be classified according to their suggested net retail price.

"Willful understatement of the suggested net retail price by as much as
fifteen percent (15%) of the actual net retail price shall render the manufacturer
liable for additional excise tax equivalent to the tax due and difference between
the understated suggested net retail price and the actual net retail price

“New brand’ shall mean a brand registered after the date of effectivity of
R.A. No. 8240.

“Suggested net retail price’ shall mean the net retail price at which new
brands, as defined above, of locally manufactured or imported distilled spirits are
intended by the manufacturer or importer to be sold on retail in major
supermarkets or retail outlets in Metro Manila for those marketed 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
suggested net retail price of the new brand against the net retail price as defined
herein and determine the correct tax bracket to which a particular new brand of
distilled spirits, as defined above, shall be classified. After the end of eighteen
(18) months from such validation, the Bureau of Internal Revenue shall


revalidates the initially validated net retail price against the net retail price as of
the time of revalidation in order to finally determine the correct tax bracket which
a particular new brand of distilled spirits shall be classified: Provided, however,
That brands of distilled spirits introduced in the domestic market between
January 1, 1997 and December 31, 2003 shall remain in the classification under
which the Bureau of Internal Revenue has determined them to belong as of
December 31, 2003. Such classification of new brands and brands introduced
between January 1, 1997 and December 31, 2003 shall not be revised except by
an act of Congress

"The rates of tax imposed under this Section shall be increased by eight
percent (8%) every two years starting on January 1, 2007 until January 1, 2011

AN ADDITIONAL EXCISE TAX OF TEN PERCENT (10%) PER PROOF
LITER SHALL BE LEVIED, ASSESSED AND COLLECTED EFFECTIVE
JANUARY 1, 2012.

"Any downward reclassification of present categories, for tax purposes, of
existing brands of distilled spirits duly registered at the time of the effectivity of
this Act which will reduce the tax imposed herein, or the payment thereof, shall
be prohibited

"The classification of each brand of distilled spirits based on the average
net retail price as of October 1, 1996, as set forth in Annex ‘A’, including the
classification of brands for the same products which, although not set forth in
said Annex’A’, were registered and were being commercially produced and
marketed on or after October 1,1996, and which continue to be commercially
produced and marketed after the effectivity of this Act, shall remain in force until
revised by Congress.

"Manufacturers and importers of distilled spirits shall, within thirty (30)
days from the effectivity of this Act, and within the first five (5) days of every third
month thereafter, submit to the Commissioner a sworn statement of the volume
of sales for each particular brand of distilled spirits sold at his establishment for
the three-month period immediately preceding.

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

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

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

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


“Sec. 2. Section 142 of the National Internal Revenue Code of 1997, as
amended, is hereby further amended to read as follows:

"SEC 142. Wines. - On wines, there shall be collected per liter of volume
capacity, the following taxes:

"(a) Sparkling wines/champagnes regardless of proof, if the net retail price
per bottle (excluding the excise tax and the value-added tax) is:

"(1) Five hundred pesos (P500.00) or less - One hundred forty-five pesos
and sixty centavos (P145.60); and

"(2) More than Five hundred pesos (P500.00) - Four hundred thirty-six
pesos and eighty centavos (P436.80).

"(b) Still wines containing fourteen percent (14%) of alcohol by volume or
less, Seventeen pesos and forty-seven centavos (P17.47); and

"(c) Still wines containing more than fourteen percent (14%) but not more
than twenty-five percent (25%) of alcohol by volume, Thirty-four pesos and
ninety-four centavos (P34.94).

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

“Net retail price’, as determined by the Bureau of Internal Revenue
through a price survey to be conducted by the Bureau of Internal 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 wine 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 wine 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 effectivity of this Act shall be taxed
under the proper classification thereof based on their suggested net retail price:
Provided, however, That such classification shall not, in any case, be lower than
the highest classification of any variant of that brand.

“A ‘variant of a brand’ shall refer to a brand on which a modifier is prefixed
and/or suffixed to the root name of the brand.

"New brands, as defined in the immediately following paragraph, shall
initially be classified according to their suggested net retail price.

“New brand’ shall mean a brand registered after the date of effectivity of
R. A. No. 8240.

“Suggested net retail price’ shall mean the net retail price at which new
brands, as defined above, of locally manufactured or imported wines are
intended by the manufacturer or importer to be sold on retail in major
supermarkets or retail outlets in Metro Manila for those marketed 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


suggested net retail price of the new brand against the net retail price as defined
herein and determine the correct tax bracket to which a particular new brand of
wine, as defined above, shall be classified. After the end of eighteen (18) months
from such validation, the Bureau of Internal Revenue shall revalidates the initially
validated net retail price against the net retail price as of the time of revalidation
in order to finally determine the correct tax bracket which a particular new brand
of wines shall be classified: Provided, however, That brands of wines introduced
in the domestic market between January 1, 1997 and December 31, 2003 shall
remain in the classification under which the Bureau of Internal Revenue has
determined them to belong as of December 31, 2003. Such classification of new
brands and brands introduced between January 1, 1997 and December 31, 2003
shall not be revised except by an act of Congress.

"The rates of tax imposed under this Section shall be increased by eight
percent (8%) every two years starting on January 1, 2007 until January 1, 2011

AN ADDITIONAL EXCISE TAX OF TEN PERCENT (10%) PER PROOF
LITER SHALL BE LEVIED, ASSESSED AND COLLECTED EFFECTIVE
JANUARY 1, 2012.

“Any downward reclassification of present categories, for tax purposes, of
existing brands of wines duly registered at the time of the effectivity of this Act
which will reduce the tax imposed herein, or the payment thereof, shall be
prohibited.

“The classification of each brand of wines based on the average net retail
price as of October 1,1996, as set forth in Annex 'B’, including the classification
of brands for the same products which, although not set forth in said "Annex B",
were registered and were being commercially produced and marketed on or after
October 1, 1996, and which continue to be commercially produced and marketed
after the effectivity of this Act, shall remain in force until revised by Congress.

"Manufacturers and importers of wines shall, within thirty (30) days from
the effectivity of this Act, and within the first five (5) days of every month
thereafter, submit to the Commissioner a sworn statement of the volume of sales
for each particular brand of wines sold at his establishment for the three-month
period immediately preceding.

“Any manufacturer or importer who, in violation of this Section, knowingly
misdeclares or misrepresents in his or its sworn statement herein required any
pertinent data or information shall, upon discovery, be penalized by a summary
cancellation or withdrawal of his or its permit to engage in business as
manufacturer or importer of wines.

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

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


“if the offender is not a citizen of the Philippines, he shall be deported
immediately after serving the sentence, without further proceedings for
deportation.”

“Sec. 3. Section 143 of the National Intemal Revenue Code of 1997, as
amended, is hereby further amended to read as follows:

"Sec. 143. Fermented Liquors. - There shall be levied, assessed and
collected an excise tax on beer, lager beer, ale, porter and other fermented
liquors except tuba, basi, tupuy and similar fermented liquors in accordance with
the following schedule:

(a) If the net retail price (excluding the excise tax and the value-added
tax) per liter of volume capacity is less than Fourteen pesos and fifty centavos
(P14.50), the tax shall be Eight pesos and twenty- seven centavos (P8.27) per
liter;

"(b) If the net retail price (excluding the excise tax and the value-added
tax) per liter of volume capacity is Fourteen pesos and fifty centavos (14.50) up
to Twenty-two pesos (P22.00), the tax shall be Twelve pesos and thirty centavos
(P12.30) per liter;

%(c) If the net retail price (excluding the excise tax and the value-added
tax) per liter of volume capacity is more than Twenty-two pesos (P22.00), the tax
shall be Sixteen pesos and thirty-three centavos (P16.33) per liter.

"Variants of existing brands and variants of new brands which are
introduced in the domestic market after the effectivity of this Act shall be taxed
under the proper classification thereof based on their suggested net retail price:
Provided, however, That such classification shall not, in any case, be lower than
the highest classification of any variant of that brand.

"A ‘variant of a brand’ shall refer to a brand on which a modifier is prefixed
and/or suffixed to the root name of the brand.

“Fermented liquors which are brewed and sold at micro-breweries or small
establishments such as pubs and restaurants shall be subject to the rate in
paragraph (e) hereof.

"New brands, as defined in the immediately following paragraph, shall
initially be classified according to their suggested net retail price

“New brand’ shall mean a brand registered after the date of effectivity of
R.A. No. 8240.

"Suggested net retail price’ shall mean the net retail price at which new
brands, as defined above, of locally manufactured or imported fermented liquor
are intended by the manufacturer or importer to be sold on retail in major
supermarkets or retail outlets in Metro Manila for those marketed 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
suggested net retail price of the new brand against the net retail price as defined
herein and determine the correct tax bracket to which a particular new brand of
fermented liquor, as defined above, shall be classified. After the end of eighteen
(18) months from such validation, the Bureau of Intems Revenue shall
revalidates the initially validated net retail price against the net retail price as of
the time of revalidation in order to finally determine the correct tax bracket which
a particular new brand of fermented liquors shall he classified: Provided,


however, That brands of fermented liquors introduced in the domestic market
between January 1, 1997 and December 31, 2003 shall remain in the
classification under which the Bureau of Internal Revenue has determined them
to belong as of December 31,2003. Such classification of new brands and brands
introduced between January 1, 1997 and December 31, 2003 shall not be
revised except by an act of Congress.

"Net retail price’, as determined by the Bureau of Internal Revenue
through a price survey to be conducted by the Bureau of Internal Revenue itself,
or the National Statistics Office when deputized for the purpose by the Bureau of
Internal Revenue, shall mean the price at which the fermented liquor is sold on
retail in at least twenty (20) major supermarkets in Metro Manila (for brands of
fermented liquor marketed nationally), 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 fermented liquor 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.

“The classification of each brand of fermented liquor based on its average
net retail price as of October 1, 1996, as set forth in Annex 'C’, including the
classification of brands for the same products which, although not set forth in
said Annex 'C’, were registered and were being commercially produced and
marketed on or after October 1, 1996, and which continue to be commercially
produced and marketed after the effectivity of this Act, shall remain in force until
revised by Congress.

“The rates of tax imposed under this Section shall be increased by eight
percent (8%) every two years starting on January 1, 2007 until January 1, 2011.

AN ADDITIONAL EXCISE TAX OF TEN PERCENT (10%) PER PROOF
LITER SHALL BE LEVIED, ASSESSED AND COLLECTED EFFECTIVE
JANUARY 1, 2012.

“Any downward reclassification of present categories, for tax purposes, of
existing brands of wines duly registered at the time of the effectivity of this Act
which will reduce the tax imposed herein, or the payment thereof, shall be
prohibited.

“The classification of each brand of wines based on the average net retail
price as of October 1,1996, as set forth in Annex ‘B’, including the classification
of brands for the same products which, although not set forth in said "Annex B",
were registered and were being commercially produced and marketed on or after
October 1, 1996, and which continue to be commercially produced and marketed
after the effectivity of this Act, shall remain in force until revised by Congress.

“Manufacturers and importers of wines shall, within thirty (30) days from
the effectivity of this Act, and within the first five (5) days of every month
thereafter, submit to the Commissioner a sworn statement of the volume of sales
for each particular brand of wines sold at his establishment for the three-month
period immediately preceding.

“Any manufacturer or importer who, in violation of this Section, knowingly
misdeciares or misrepresents in his or its sworn statement herein required any
pertinent data or information shall, upon discovery, be penalized by a summary
cancellation or withdrawal of his or its permit to engage in business as
manufacturer or importer of wines.


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

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

“if the offender is not a citizen of the Philippines, he shall be deported
immediately after serving the sentence, without further proceedings for
deportation."

SECTION 2. Additional Revenues. — The additional revenues herein collected shall be
remitted directly to the Department of Education for exclusively for the information
communication technology (ICT) program of public elementary and secondary school
students and teachers development, as well as the construction of new classrooms and
the hiring of new teachers preferably with ICT proficiency, Math, English and Science
majors.

SECTION 3. Implementing Rules and Regulations. — The Secretary 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 within a
period of ninety (90) days from approval hereof.

SECTION 4. Separability Clause. — If any of the provisions of this Act is declared
invalid by a competent court, the remainder of this Act or any provision not affected by
such declaration of invalidity shall remain in force and effect.

SECTION 5. Repealing Clause. — All laws, decrees, ordinances, rules and regulations,
executive or administrative orders, and such presidential issuances as are inconsistent
with any provision of this Act are hereby repealed, amended or otherwise modified
accordingly.

SECTION 6. Effectivity. — This Act shall take effect on January 1, 2012.