Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL No._177

Introduced by Representatives
HORACIO P. SUANSING, JR. and ESTRELLITA B, SUANSING

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

EXPLANATORY NOTE

Since its enactment in December 2012, Republic Act No. 10351, or the Excise Tax Reform
Law, has made positive impacts on revenue generation and public health. RA 10351 corrected
the long-standing weaknesses of the tobacco and alcohol excise tax system, and increased the
rates to reduce the demand for alcohol and tobacco products. It also contributed in raising the
much-needed revenues to fund the Universal Health Care (UHC) Program of the Philippine
Government.

The Excise Tax Reform Law succeeded in attaining its revenue objectives. The government
collected PHP 242 billion in incremental revenues (CY 2013-2016) since its implementation
in 2013. The Department of Health (DOH) budget increased from PHP 50.44 billion in 2013
to PHP 106 billion in 2018, or a growth of 110 percent.' A large amount of the incremental
revenues earmarked for health is allocated for premium subsidies for the health insurance of
indigents and senior citizens not covered by the National Health Insurance Program.

Excise tax on alcohol products only account for an average of 33 percent of the total alcohol
and tobacco excise tax collections, while excise tax on tobacco products account for the
remaining 67 percent from 2013 to 2017.7 However, data from the Family Income and
Expenditure Survey (FIES) prior to the implementation of the Sin Tax Law shows that alcohol
accounts for 40 percent of the total alcohol and tobacco expenditure while tobacco accounts
for 60 percent of the said total. This bill seeks to increase the tax on alcohol products to
approximate the 40 percent-to-60 percent sharing of alcohol and tobacco expenditure.
Moreover, excise tax collections and the volume of removals of alcohol products continued to
increase even after the implementation of RA 10351. This is an indication that the increase in
the rates for alcohol products implemented in 2013 was not enough to reduce the consumption
of alcohol. Therefore, there is a need to further increase the rates of alcohol products in order
to achieve such purpose.

Retrieved from https://www.doh.gov.ph/doh-budget
2A Review of Excise Taxation of + Sin Products. Retrieved from
http://www.ntre.gov.ph/images/journal/2018/j20180304a.pdf


This bill aims to increase the excise tax rates on alcohol products and the indexation rate to 10
percent to account for inflation and income. Moreover, it also seeks to remove the distinction
on whether fermented liquors are brewed and sold in microbreweries and pubs or in factories
for simpler administration. To further simplify the tax administration on spirits, the tax shall
be based on volume or per liter and no longer on “per proof liter.” The incremental revenues
that will be generated will fund social services and infrastructure programs of the government.

Beyond health consequences, the harmful use of alcohol also leads to behaviors such as drunk
driving and domestic violence. According to the Online National Electronic Injury Surveillance
System of the Department of Health, there were 3,901 vehicular accidents due to alcohol
intoxication, or 8.83 percent of the 44,158 transport or vehicular crash-related injury cases, in
2017. Moreover, excessive alcohol drinking causes diseases such as cirrhosis or liver damage
and pancreatitis. Further, the World Health Organization (WHO) disclosed that excessive
intake of alcohol killed 3 million people in 2018. The WHO added that alcohol consumption
causes death and disability relatively early in life such that, in the 20 to 39 age group,
approximately 13.5 percent of the total deaths are alcohol-attributable.* The excise tax on
alcohol should be increased to discourage consumption and to make the consumers of alcohol
bear the cost of the negative effects on other people who are not consuming the product.

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

woracig? SUANSING, JR.

2™ District of Sultan Kudarat 1* District of Nueva Ecije

3 Retrieved from https://oneiss.doh.gov.ph

4 Alcohol. Retrieved from https./;www.who.intnews-room/fact-sheets/detail/alcohol

5 This bill was originally filed by Rep. Horacio P, Suansing, Jr. during the 17" Congress, Third Regular Session.
It was approved on Third Reading on December 3, 2018.


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

177

HOUSE BILL NO.

Introduced by Representatives
HORACIO P. SUANSING, JR. and ESTRELLITA B. SUANSING

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

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

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

CHAPTER 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:
[(a) Effective on January 1, 2013

(1) An ad valorem tax equivalent to fifteen percent (15%) of the net retail price
(excluding the excise tax and the value-added tax) per proof, and

(2) In addition to the ad valorem tax herein imposed, a specific tax of Twenty pesos
(P20.00) per proof liter.

(b) Effective on January 1, 2015

(1) Anaad 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.

(©) In addition to the ad valorem tax herein imposed, the specific tax rate of Twenty pesos
(P20.00) per proof liter imposed under this Section shall be increased by four percent (4%) every


year thereafter effective on January 1, 2016, through revenue regulations issued by the Secretary
of Finance.]

(A) EFFECTIVE ON JANUARY 1, 2020

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

(2) IN ADDITION TO THE AD VALOREM TAX HEREIN IMPOSED, A
SPECIFIC TAX OF FORTY PESOS (P40.00) PER LITER.

(B) EFFECTIVE ON JANUARY 1, 2021

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

(2) IN ADDITION TO THE AD VALOREM TAX HEREIN IMPOSED, A
SPECIFIC TAX OF FORTY FIVE PESOS (P45.00) PER LITER.

(C) EFFECTIVE ON JANUARY 1, 2022

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

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

(D) EFFECTIVE ON JANUARY 1, 2023

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

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

(E) IN ADDITION TO THE AD VALOREM TAX HEREIN IMPOSED, THE SPECIFIC
‘TAX IMPOSED UNDER THIS SECTION SHALL BE INCREASED BY TEN PERCENT
(10%) EVERY YEAR THEREAFTER EFFECTIVE ON JANUARY 1, 2024, THROUGH
REVENUE REGULATIONS ISSUED BY THE SECRETARY OF FINANCE.

Medicinal preparations, flavoring extracts, and all other preparations, except toilet preparations,
of which, excluding water, distilled spirits form the chief ingredient, shall be subject to the 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 (15OC). 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] 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 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 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 (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 price (excluding the value added tax and the excise
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

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 retai 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, 2020, the following excise taxes:

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

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

(2) More than Five hundred pesos (PS00.00) — [Seven hundred pesos (P700.00)]
NINE HUNDRED THIRTY-SEVEN PESOS (P937.00).

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

(©) 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).

The rates of tax imposed under this Section shall be increased by [four percent (4%)] TEN
PERCENT (10%) every year thereafter effective on January 1, [2014] 2021, through revenue
regulations issued by the Secretary of Finance.

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 tax. 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] BUREAU OF INTERNAL REVENUE (BIR), and shall exclude retail outlets or
kiosks, convenience or sai tores, 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.



‘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 price (excluding VAT and excise 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 wine/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 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 sparkling wine/champagne shall be classified.

The proper tax classification of sparkling wines/champagnes, whether registered before
the effectivity of this Act, shall be determined every two (2) years from the date of effecti
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
swomn statement of the volume of sales AND REMOVALS 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, 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. ALCOPOPS AND Fermented Liquor. - There shall be levied, assessed and collected
an excise tax on ALCOPOPS, beer, lager beer, ale, porter and other fermented liquors except
tuba, basi, tapuy and similar domestic 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

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 capac fiy 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 (PS0.60), 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, 2020, THE TAX ON ALL ALCOPOPS AND
FERMENTED LIQUORS REGARDLESS IF MANUFACTURED IN FACTORIES OR
SOLD AND BREWED AT MICRO-BREWERIES OR SMALL ESTABLISHMENTS
SUCH AS PUBS AND RESTAURANTS SHALL BE FORTY PESOS (P40.00) PER
LITER.

EFFECTIVE ON JANUARY 1, 2021, THE TAX ON ALL ALCOPOPS AND
FERMENTED LIQUORS REGARDLESS IF MANUFACTURED IN FACTORIES OR
SOLD AND BREWED AT MICRO-BREWERIES OR SMALL ESTABLISHMENTS
SUCH AS PUBS AND RESTAURANTS SHALL BE FORTY FIVE PESOS (P45.00) PER
LITER.

EFFECTIVE ON JANUARY 1, 2022, THE TAX ON ALL ALCOPOPS AND
FERMENTED LIQUORS REGARDLESS IF MANUFACTURED IN FACTORIES OR
SOLD AND BREWED AT MICRO-BREWERIES OR SMALL ESTABLISHME!
SUCH AS PUBS AND RESTAURANTS SHALL BE FIFTY PESOS (P50.00) PER LITER.

EFFECTIVE ON JANUARY 1, 2023, THE TAX ON ALL ALCOPOPS AND
FERMENTED LIQUORS REGARDLESS IF MANUFACTURED IN FACTORIES OR
SOLD AND BREWED AT MICRO-BREWERIES OR SMALL ESTABLISHMENTS
SUCH AS PUBS AND RESTAURANTS SHALL BE FIFTY FIVE PESOS (P55.00) PER
LITER.

The rates of tax imposed under this Section shall be increased by [four percent (4%)] TEN
PERCENT (10%) every year thereafter effective on January 1, [2018] 2024, 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%)

10


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 the 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.]

‘ALCOPOP" SHALL MEAN ALCOHOLIC BEVERAGES WITH ALCOHOL CONTENT OF LESS THAN
10% ALCOHOL BY VOLUME AND WHOSE ALCOHOL IS SOURCED FROM MALT OR A
DISTILLATION PROCESS. ALCOPOP SHALL BE TAXED AS FERMENTED LIQUOR.

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 swom 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, 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 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.

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


SECTION 3. 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.

SECTION 4. Effectivity. — This Act shall take effect upon its publication either in the Official

Gazette or in a newspaper of general circulation.

Approved,