Republic of the Philippines
HOUSE OF REPRESENTATIVES,
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

House BillNo 2595

Introduced by Representative Sharon S. Garin

EXPLANATORY NOTE

This bill forms part of the Comprehensive Tax Reform Program Package 2 plus. It
seeks to increase the excise tax rates on distilled spirits to 22% from 20% ad valorem on the
net retail price (NTP) per proof and a specific tax rate of P30 per liter from P23.40. The
specific tax rate will then be increased by P5 every year until it reaches P45 in 2022, to
increase by 7% annually beginning 2023.

In this bill also will levy on sparkling wines a 15% ad valorem per liter, which is not
imposed in the present system. It is in addition to P650 specific tax per liter which shall be
increase by 7% annually. On the other hand, still wines and carbonated wines with more than
14% alcohol will be taxed at P80 per liter with 7% increase annually.

For the fermented liquors, this bill seeks to increase to P28 per liter from P25.40 and
the specific tax rate will increase to P32 in 2020; P34 in 2012; and P36 in 2022. The same will
be increased by 7% annually, thereafter.

The increase tax rates is based on the factored-in inflation rate and the additional
revenue raising effort of the government

According to the Bureau of Internal Revenue, 70% of the total excise tax collection was
collected from tobacco and cigarette products while only 30% was collected from alcohol
products. This means that tobacco and cigarette products are heavily taxed than that of
alcohol products because of the health effects. Tobacco and cigarette products have adverse
health effects while alcohol is believed to have certain health benefits when drunk moderately.

This representation still believes that the tax rates on alcohol products have not yet
‘saturated to achieve the much-needed revenue of the government.

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

Party-ift, AAMBIS-OWA


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

5
House Bill No. 2555

Introduced by Representative Sharon S. Garin

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 House of Representatives of the Philippines in
Congress assembled
SECTION 1. Title Vi, Chapter Ill, Excise Tax on Alcohol Products, of the National
Internal Revenue Code (NIRC) of 1997, as amended, is hereby further amended to read
as follows
“CHAPTER Ill - EXCISE TAX ON ALCOHOL PRODUCTS
“SEC. 141. Distilled Spirits. - On distilled spirits, subject to the provisions of
Section 133 of this Code, an excise tax shall be levied, assessed and collected
based on the following schedules
[(@) 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) imposed under this Section shall be increased by four
percent (4%) every year thereafter effective on January 1, 2016, through
revenue regulations issued by the Secretary of Finance.]

*(A) EFFECTIVE JANUARY 1, 2019

“(1) AN AD VALOREM — TAX EQUIVALENT To
TWENTY-TWO PERCENT (22%) 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 THIRTY PESOS (P30.00) PER PROOF LITER.

*(B) EFFECTIVE JANUARY 1, 2020

“(1) AN AD VALOREM — TAX EQUIVALENT To
TWENTY-TWO PERCENT (22%) 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 THIRTY-FIVE PESOS (P35.00) PER PROOF LITER.

“(C) EFFECTIVE JANUARY 1, 2021

“(1) AN AD VALOREM —- TAX EQUIVALENT To
TWENTY-TWO PERCENT (22%) 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.

*(D) EFFECTIVE JANUARY 1, 2022

“(1) AN AD VALOREM TAX EQUIVALENT To
TWENTY-TWO PERCENT (22%) 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-FIVE PESOS (P45.00) PER PROOF LITER.


“(E) IN ADDITION TO THE AD VALOREM TAX HEREIN IMPOSED, THE
SPECIFIC TAX IMPOSED UNDER THIS SECTION SHALL BE INCREASED
BY SEVEN PERCENT (7%) EVERY YEAR THEREAFTER, EFFECTIVE
JANUARY 1, 2023, THROUGH REVENUE REGULATIONS TO BE 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 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
(0.7939) at fifteen degrees centigrade (15°C). 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 applicable excise tax and the value-added tax
For distilled spirits 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. THIS SHALL INITIALLY BE
PROVIDED BY THE MANUFACTURER THROUGH A SWORN STATEMENT
AND SHALL BE VALIDATED BY THE BUREAU OF INTERNAL REVENUE
(BIR) THROUGH A PRICE SURVEY.

['Major supermarkets, as contemplated under this Act, shall be those with
the highest annual gross sales in Metro Manila or the region, as the case may


be, as determined by the 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
distilled spirit is not sold in major supermarkets, the price survey can 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 }

*MAJOR SUPERMARKETS, AS CONTEMPLATED UNDER THIS ACT,
SHALL BE THOSE WITH THE HIGHEST ANNUAL GROSS SALES IN
METRO MANILA OR THE REGION, AS THE CASE MAY BE, AS
DETERMINED BY THE BUREAU OF INTERNAL REVENUE (BIR), 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 ANDIOR BRANCHES OF EACH OTHER: PROVIDED,
FINALLY, THAT IN CASE A PARTICULAR DISTILLED SPIRIT IS NOT SOLD
IN MAJOR SUPERMARKETS, THE PRICE SURVEY CAN 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 a BIANNUAL price survey under oath

“The methodology and alll pertinent documents used in the conduct of the
latest price survey shall be submitted to the Congressional Oversight
Committee on the Comprehensive Tax Reform Program (COCCTRP) created
under Republic Act No. 8240.

“Understatement of the suggested net retail price by as much as fifteen
percent (15%) of the actual net retail price shall render the manufacturer or
importer 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.


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

* ‘Suggested net retail price’ shall mean the net retail price (EXCLUDING
THE EXCISE TAX AND THE
VALUE-ADDED TAX) at which 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 initially determine the correct tax on a newly introduced
distilled spirits. After the end of nine (9) months from such validation, the
Bureau of Internal Revenue shall revalidate 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 on a newly introduced distilled spirits.

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

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

“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 AND REMOVALS 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, 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. 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 prooff, if the net retail price
per bottle of seven hundred fifty milliliter (750 ml.) volume capacity (excluding
the excise tax and value-added tax) is]

['(1) Five hundred pesos (P500.00) or less - Two hundred fifty pesos
(P250.00); and

“(2) More than Five hundred pesos (P500.00) - Seven hundred pesos
(P700.00).]

“(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 LITER; AND

“(2) IN ADDITION TO THE AD VALOREM TAX HEREIN IMPOSED, A
SPECIFIC TAX OF SIX HUNDRED FIFTY PESOS (P650.00) PER LITER.

“THE SPECIFIC TAX IMPOSED HEREIN SHALL BE INCREASED BY
SEVEN PERCENT (7%) EVERY YEAR THEREAFTER, EFFECTIVE ON
JANUARY 1, 2020, THROUGH REVENUE REGULATIONS TO BE ISSUED
BY THE SECRETARY OF FINANCE.


“(b) Still wines and carbonated wines containing NOT MORE THAN
fourteen percent (14%) of alcohol by volume, [or less, Thirty pesos (P30.00)]
FORTY PESOS (P40.00) PER LITER; and

*(c) Still wines and carbonated wines containing more than fourteen percent
(14%) [but not more than twenty-five percent (25%)] of alcohol by volume,
[Sixty pesos (P60.00)] EIGHTY PESOS (P80.00) PER LITER

“The rates of tax imposed under this Section shall be increased by [four
percent (4%)] SEVEN PERCENT (7%) every year thereafter effective on
[January 1, 2014] JANUARY 1, 2020, through revenue regulations TO BE
issued by the Secretary of Finance

“PROVIDED, THAT COOKING WINES CONTAINING A SALT CONTENT
OF NOT LESS THAN 1.5 G/100 ML SHALL NOT BE SUBJECT TO THE TAX
IMPOSED HEREIN.

[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’ shall mean the price at which sparkling wine[/champagne]
is sold on retail in at least five (5) major supermarkets in Metro Manila,
excluding the © amount intended to cover the ~—_ applicable
excise tax and = the_-~—- value-added ~—=sttax. += For_~—_— sparkling
wines[/champagnes] 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. THIS SHALL INITIALLY BE
PROVIDED BY THE MANUFACTURER THROUGH A SWORN STATEMENT
AND SHALL BE VALIDATED BY THE BUREAU OF INTERNAL REVENUE
THROUGH A PRICE SURVEY.

[Major supermarkets, as contemplated under this Act, shall be those with
the highest annual gross sales in Metro Manila or the region, as the case may
be, as determined by the 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, the price survey
can be conducted in retail outlets where said sparkling wine/champagne is sold
in Metro Manila or the region, as the case may be, upon the determination of
the Commissioner of Internal Revenue ]

*MAJOR SUPERMARKETS, AS CONTEMPLATED UNDER THIS ACT,
SHALL BE THOSE WITH THE HIGHEST ANNUAL GROSS SALES IN
METRO MANILA OR THE REGION, AS THE CASE MAY BE, AS
DETERMINED BY THE BUREAU OF INTERNAL REVENUE (BIR), 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 IS NOT SOLD
IN MAJOR SUPERMARKETS, THE PRICE SURVEY CAN
BE CONDUCTED IN RETAIL OUTLETS WHERE SAID SPARKLING WINE 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
through a BIANNUAL price survey under oath

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

“Understatement of the suggested net retail price by as much as fifteen
percent (15%) of the actual net retail price shall render the manufacturer or
importer 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.

“Sparkling wines{/champagnes] introduced in the domestic market after the
effectivity of this Act shall be initially tax classified according to their suggested
net retail prices

* ‘Suggested net retail price’ shall mean the net retail price (EXCLUDING
THE EXCISE TAX AND THE VALUE-ADDED TAX) at which locally


manufactured or imported sparkling wines[/champagnes] 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 sparkling winef/champagne] against the net retail price as defined
herein and initially determine the correct tax bracket to which a newly
introduced sparkling wine[/champagne] shall be classified. After the end of nine
(9) months from such validation, the Bureau of Internal Revenue shall
evalidate 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 to
which a newly introduced sparkling wine[/champagne] shall be classified.

“The proper tax classification of sparkling
wines[/champagnes], whether registered before or after the effectivity of this
Act, shall be determined every

two (2) years from the date of effectivity of this Act

[All sparkling wines/champagnes existing in the market at the time of the
effectivity of this Act shall be taxed according to the net retail prices and the tax
rates provided above based on the latest price survey
of the sparkling wines/champagnes conducted by the Bureau of Internal
Revenue]

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

“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 AND
REMOVALS for each particular brand of wine[s] sold at [his] THEIR
establishment for the three-month period immediately preceding

“Any manufacturer or importer who, in violation of this Section, 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 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. 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, tapuy and similar 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 of volume capacity is Fifty pesos and sixty centavos (P50.60) or less,
the tax shall be Fifteen pesos (P15.00) per liter; and

“(b) If the net retail price (excluding the excise tax and the value-added tax)
per liter of volume 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 of volume capacity is Fifty pesos and sixty centavos (P50.60) or less,
the tax shall be Seventeen pesos (P17.00) per liter; and

“(b) If the net retail price (excluding the excise tax and the value-added tax)
per liter of volume capacity is more than Fifty pesos and sixty centavos
(P50.60), the tax shall be Twenty-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 of volume capacity is Fifty pesos and sixty centavos (P50.60) or less,
the tax shall be Nineteen pesos (P19.00) per liter; and

*(b) If the net retail price (excluding the excise tax and the value-added tax)
per liter of volume capacity is more than Fifty pesos and sixty centavos
(P50.60), the tax shall be Twenty-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 of volume capacity is Fifty pesos and sixty centavos (P50.60) or less,
the tax shall be Twenty-one pesos (P21.00) per liter; and

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

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

“EFFECTIVE ON JANUARY 1, 2019, THE TAX ON ALL FERMENTED
LIQUORS SHALL BE TWENTY-EIGHT PESOS (P28.00) PER LITER.

“EFFECTIVE ON JANUARY 1, 2020, THE TAX ON ALL FERMENTED
LIQUORS SHALL BE THIRTY-TWO PESOS (P32.00) PER LITER.

“EFFECTIVE ON JANUARY 1, 2021, THE TAX ON ALL FERMENTED
LIQUORS SHALL BE THIRTY-FOUR PESOS (P34.00) PER LITER.

“EFFECTIVE ON JANUARY 1, 2022, THE TAX ON ALL FERMENTED
LIQUORS SHALL BE THIRTY-SIX PESOS (P36.00) PER LITER.

“THE SPECIFIC TAX RATES IMPOSED HEREIN SHALL BE APPLIED TO
ALL FERMENTED LIQUORS REGARDLESS IF MANUFACTURED IN
FACTORIES OR SOLD AND BREWED AT MICRO-BREWERIES OR SMALL
ESTABLISHMENTS SUCH AS PUBS AND RESTAURANTS.

“The rates of tax imposed under this Section shall be increased by [four
percent (4%)] SEVEN PERCENT (7%) every year thereafter effective on
[January 1, 2018,] JANUARY 1, 2023, through revenue regulations issued by
the Secretary of Finance. [However, in case of fermented liquors affected by
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 such as
pubs and restaurants shall be subject to the rate of
Twenty-eight pesos (P28,00) per liter effective 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 the
Secretary of Finance.)

[Fermented liquors introduced in the domestic market after the effectivity of
this Act shall be initially tax classified according to their suggested net retail
prices]

[' ‘Suggested net retail price’ shall mean the net retail price at which 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
newly introduced fermented liquor against the net retail price as defined herein
and initially determine the correct tax bracket to which a newly introduced
fermented liquor, as defined above, shall be classified. After the end of nine (9)
months from such validation, the Bureau of Internal Revenue shall revalidate
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 to which a newly
introduced fermented liquor shall be classified ]

[ ‘Net retail price’ shall mean the price at which the fermented liquor is sold
on retail in at least five (5) 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 ]

[Major supermarkets, as contemplated under this Act, shall be those with
the highest annual gross sales in Metro Manila or the region, as the case may


be, as determined by the 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
fermented liquor is not sold in major supermarkets, the price survey can be
conducted in retail outlets where said fermented liquor 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 a price survey under oath.)

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

[Understatement of the suggested net retail price by as much as fifteen
percent (15%) of the actual net retail price shall render the manufacturer or
importer 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]

[Any downward reclassification of present categories, for tax purposes, of
fermented liquors 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 proper tax classification of fermented liquors, whether registered
before or after the effectivity of this Act, shall be determined every two (2) years
from the date of effectivity of this Act]

[All fermented liquors existing in the market at the time of the effectivity of
this Act shall be classified according to the net retail prices and the tax rates
provided above based on the latest price 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 shall be submitted to the Congressional Oversight
Committee on the Comprehensive Tax Reform Program created under
Republic Act No. 8240]


“Every brewer or importer of fermented liquor 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 AND REMOVALS for each particular brand of fermented liquor sold at his
establishment for the three-month period immediately preceding

“Any brewer or importer who, in violation of this Section, misdeciares 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 brewer or importer of fermented liquor.

“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. 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.

SEC. 3. Separability Clause. - \f any provision of this Act shall be held
unconstitutional or invalid, the other provisions not otherwise affected shall remain in full

force and effect.
SEC. 4. Repealing Clause. - All laws, decrees, executive orders, rules

and

regulations or parts thereof which are contrary to or inconsistent with this Act are hereby

repealed, amended or modified accordingly.


SEC. 5. Effectiviy. - This Act shall take effect on January
1, 2019 after its complete publication either in the Official Gazette or in a newspaper of
general circulation.

Approved,


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