FIFl EENTH CONGRESS OF THE REPUP\JBUC 
OF THE PHILIPPINES 
7/iird Regular Session 
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SENATE 
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(In substitution of I-L No, 5727, tailing into consiueration S, Nos. 2763, 2764, 2998 and 3249) 
Prepared by the Committee on Ways 8ncllVleans with Senators Laeson, Defensor·Santiago and Recto as 
authors thereof 
AN ACT 
RESTHUCTUHING THE EXCISE TAX ON ALCOHOL AND TOBACCO PRODUCTS BY AIVIENDING 
SECTIONS 141, 142, 143, 144, 145, 131, 288 AND 289 OF HEPUBLIC ACT NO. 8424, OTHEHWISE 
KNOWN AS THE NATIONAL INTEHNAL REVENUE CODE OF Hl97, AS AIVIENDED BY REPUBLIC ACT 
NO. 9334, AND FOH OTHER PUHPOSES 
Be it enilcled by tfle Senate and !-louse of Representatives of tile Phifippines in Congress assembled: 
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SECTION 1. Section 141 of Republic Act No. 8424, otherwise known as the National Internal 
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Revenue Code of 1997, as 81llemied by Republic Act No. 9334, is hereby further amended to read as follows: 
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"SEC. 141. Distilled Spirits,·· On distilled spirits, SUBJECT TO THE PF{OVISIONS or Sr-:CTION 
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133 or- THIS CODI:, AN EXCISE TAX [there] shall be collect eli [, subject to the provisions of Soction 
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133 of this Code, excise] IN ACCOHDANCE WITH THE: FOLLOWING SCHEDULES 
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"A, I:FFECllVE MAHCH 1, 2013 .. 
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"(I) THOSE ON WHICH At~ EXCISE TAX OF FOUFITEEN PESOS AND SIXTY·EIGHT 
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CENTAVOS (P14.68) PEl; PROOF UTEH IS COLLEelED If~ 2012 ... TWENTY 
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PESOS (P20.00) PER PHOOF IJrr:x 
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"(2) THOSE ON WHICH AN EXCISE TAX 01: ONE HUNDf<EI) FIFTY·EIGHT PESOS 
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AND SEVENTY·THREE: CENTAVOS (P1fi8.73) PErI PROOf' LlTEH IS COLLI:CTED 
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IN 2012 .. EIGHTY PESOS (pOO.OO) PEH PROOI: LITER 
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"(3) THOS[: Ol~ WHICH AN [XCiSI. TAX PME Of' THRlT HUNDFlED 2,[VENTE[N 
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PFSOS AND FORTY-[OUH CtNTIWOS (1"317/14) pm PROOF UTI:I:.z IS COLl.FC1ED 
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IN 2012· OI,E HUNOHL::O SIXTY I~ESUS (PIGO (0) PEH I)ROUF LlTEll; AND 


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"(4) THOSE ON WHICf I fIN EXCISE T!\X or: SIX HUNDflED THIRTYFOUH PE:SOS 
AND NINETY CENfAVOS (P634.90) PErt PROOf' LITER IS COLLECTED IN 2012 
.. THllH: HUNIlHEDl WENTY PESOS (p320.00) PER PROOF 1.1 fER 
"ON NEWL Y INTf10DUCEIJ DI~)TII.LE[) SPIHITS WITHIN TH[ PEH!OD MARCH 1, 2013 
" 
10 FEBHU!\f\Y :28, 
?1J1~i, THEHL :;H/\LL [lE COLLECTHJ AN EXCISE TAX 
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} " ., 
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ACCORDI\NCE: WITH THE SUGGESTED Nf:T RETAIL 10RIC[ ([eXCLUDING THE E:XCISE 
TAX i\ND THE VAlUf'ADDEll ri\X) 
fJH~ BOTTLE OF S[,IIEN HUNDHf.I) FIITY 
MILUIJTEf\S ("1!)O ML) VOLUME CAF'/\CITY AND WITH THE FOl.LOWING SCHEDULE 
"('I) LESS THAN NINETY PESOS (F'90.00) ... TWENTY PEsm; (F'20,OO) PEfl flfWOI 
LlTEf~; 
"(2) NINE I l' I)ESOS (£'90.00) UP TO O~JE HUNDHED FIFTY PESOS (1"'15000) .-. [IGIITY 
I)ES08 (P80,00) P[R PI'\OOI' LlTErI; 
"(3) MORr: lHAN ONE 1-IUNDFlfcD [-IFlY 1"1.'808 (f'150,OO) UF) TO TWO HUN[)[,Ef) 
FIFTY PESOS (P2tiO.OO) .. ONE HUNDRED SIXTY PESOS (p160.00) PEH [)ROOI: 
LITE R; Af\lD 
"(4) MOREl HAI~ TWO HUNDPED FIFTY PESOS (P:lbO.OO) .- THf-ZEE HUNDf{ED 
I WENTY Pt:SOS (1'320.00) PER I'HOOF !.iTER. 
"11. HTECllVE fvllIHC11 1, ~OI5, AN EXCISE TAX SHIILL BE COLU:ClT:'f) IN ACCOfm/\f\lCf, 
WITH HIL, NET FIt: fAil PfIICE: (EXCLUDING THt: EXCISE TAX AND THE V/\I.UE-ALJOED T!IX) 
pm 110rfLl:: OF SEVEI'I HUf\I[lr'ED FIFTY fVlILLILIl EHS (750 MI.) VOLUME eM'ACllY: 
"('I) u:ss THi\N [\/II\I[TY PE:,OS (P90,00) .. TWENTY·ONE PESOS AND SIXTY 
CEI~-I AVOS (Pt'1.GO) PeR PIIOOF Ul ER: 
"(2) NINETY PESO~i (p90.00) UP 1'0 ONE' HUNDH[D HFTY FJESOS (10150.00) .. 
EIGHTY-SIX PFSOS AND FORTY CENTfwas (1086.40) F'Ef< PI\oOf LITER 
"(3) fVlOI~E' THAN ONE' HUN[)I~[~D HF-I Y PESOS (['150.00) UP TO WVO HUNUHED 
FIFTY I'[sm, (P250,(J()) -- ONE HUNDHED SE\lf.'NTY·TWO PESO;,; AND [IGHTY 
CI=NTAIIOS (PH2,80) Pl:H I"HOOF UTEFl; AND 


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"(4) MORE THAN TWO HUNDRED FIFTY PESOS (P250.00) -- THREE HUNDRED 
FORTY-FIVE PESOS AND SIXTY CENTAVOS (P345.60) PER PROOF LITER. 
"THE 
NET RETAIL PRICE CUT-OFFS AND THE CORRESPONDING TAX RATES IMPOSED 
UNDER THIS SECTION SHALL BE INCREASED BY EIGHT PERCENT (8%) EVERY TWO (2) YEARS 
THEREAFTER STARTING MARCH 1,2017 UNTIL MARCH 1, 2019 AND BY FOUR PERCENT (4%) 
ON MARCH 1, 2020. 
"THE RECLASSIFICATION OF EXISTING DISTILLED SPIRITS SHALL BE BASED ON THE PRICE 
SURVEY TO BE CONDUCTED BY THE BUREAU OF INTERNAL REVENUE WITHIN THE MONTH 
OF D~CEMBER IMMEDIATELY PRECEDING THE EFFECTIVITY OF THE NEW EXCISE TAX 
SCHEDULE: PROVIDED, 
THAT NEWLY INTRODUCED DISTILLED SPIRITS OR THOSE 
INTRODUCED IN THE MARKET AFTER THE EFFECTIVITY OF THE NEW EXCISE TAX SCHEDULE 
SHALL BE INITIALLY CLASSIFIED ACCORDING TO THEIR SUGGESTED NET RETAIL PRICE. 
["(a) If produced from the sap of nipa, coconut, cassava, carnote, 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 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 (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), 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. 
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"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. 
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'''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' 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 DISTILLED 
SPIRITS [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 applicable excise tax and value-added tax. 
["Variants of existing brands and variants of new brands which are introduced in domestic 
market after the effectivity of this Act shall be taxed under the proper classification thereof based on 
their suggested retail price: Provided, however, That such classification shall not, in any case, be 
lower than the highest classification of any variant of that brand.] 
I [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.) 
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["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 NEWLY INTRODUCED 
[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 NEWLY INTRODUCED DISTILLED SPIRITS [new brand] against 
the net retail price defined herein and determine the correct tax bracket to which a NEWLY 
INTRODUCED [particular new brand o~ distilled spirits, as defined above, shall be classified, After 
TWELVE (12) [the eighteen (18)] 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 
[particular new brand o~ 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 to 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,] 
["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 
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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.] 
"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 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. 
"Manufacturers and/OR 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 o~ distilled spirits 
sold [at his establishment] for the three-month period immediately preceding. 
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"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/SHE shall be deported immediately after 
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"erving the sentence, without further proceedings for deportation," 
SEC. 2. Section 142 of the National Internal Revenue Code of 1997, as amended by Republic Act No, 
9334, is hereby further amended to read as follows: 
"SEC, 142, Wines, - On wines, SUBJECT TO THE PROVISIONS OF SECTION 133 OF THIS 
CODE, AN EXCISE TAX [there] shall be collected per liter of volume capacity IN ACCORDANCE WITH 
the following SCHEDULE [taxes] EFFECTIVE MARCH 1,2013: 
"(A[a]) SPARKLING WINES/CHAMPAGNES, -
"Sparkling wines/c~ampagnes regardless of proof, if the net retail price per bottle OF SEVEN 
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HUNDRED FIFTY MILLILITER (750 ML,) VOLUME CAPACITY (excluding the excise tax and the value-
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added tax) is: 
"(1) Five hundred pesos (P500,OO) or less -
TWO HUNDRED FIFTY PESOS (P250,OO) [One 
hundred forty-five pesos and sixty centavos (P145,60)J; and 
"(2) More than Five hundred pesos (P500,OO) -SEVEN HUNDRED PESOS (P700,OO) [Four 
hundred thirty-six pesos and eighty centavos (P436,80)]. 
'THE NET RETAIL PRICE CUT-OFFS AND THE CORRESPONDING TAX RATES IMPOSED 
UNDER THIS PARAGRAPH (A) SHALL BE INCREASED BY EIGHT PERCENT (8%) EVERY TWO (2) 
YEARS THEREAFTER STARTING MARCH 1, 2015 UNTIL MARCH 1, 2019 AND BY FOUR 
PERCENT (4%) ON MARCH 1,2020, 
"THE RECLASSIFICATION OF EXISTING WINES SHALL BE BASED ON THE PRICE SURVEY TO 
BE CONDUCTED BY THE BUREAU OF INTERNAL REVENUE WITHIN THE MONTH OF DECEMBER 
IMMEDIATELY PRECEDING THE EFFECTIVITY OF THE NEW EXCISE TAX SCHEDULE: 
PROVIDED, THAT NEWLY INTRODUCED WINES OR THOSE INTRODUCED IN THE MARKET 
AFTER THE EFFECTIVITY OF THE NEW EXCISE TAX SCHEDULE SHALL BE INITIALLY 
CLASSIFIED ACCORDING TO THEIR SUGGESTED NET RETAIL PRICE, 
"(B) STILL WINES AND CARBONATED WINES,--
"(1 [b]) Still wines AND CARBONATED 
WINES containing fourteen percent (14%) of 
alcohol by volume or less, THIRTY PESOS (P30,OO) [Seventeen pesos and forty-seven 
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centavos (P17.47)]; and 
"(2[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) [Thirty-four pesos and ninety-four centavos (P34,94)). 
'THE RATES OF TAX IMPOSED UNDER THIS PARAGRAPH (B) SHALL BE INCREASED 
BY EIGHT PERCENT (8%) EVERY TWO YEARS THEREAFTER EFFECTIVE MARCH 1, 2015 
UNTIL MARCH 1, 2019 AND BY FOUR PERCENT (4%) ON MARCH 1,2020, 
"(C) FORTIFIED WINES, -
"Fortified wines containing more than twenty-five percent (25%) of alcohol by volume shall be 
taxed as distilled spirits: PROVIDED, THAT THE EXCISE TAX RATE SHALL NOT BE LOWER 
THAN EIGHTY PESOS (P80,aO) PER PROOF LITER. 'Fortified wines' shall mean natural 
wines to which distilled spirits are added to increase their alcoholic strength, 
"'NEWLY INTRODUCED FORTIFIED WINES' SHALL MEAN THOSE REGISTERED AFTER 
THE DATE OF EFFECTIVITY OF THIS ACT, 
'''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 
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 WINES [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 appl'lcable 
excise tax and value-added tax, 
["Variants of existing brands and variants of new brands which are introduced in domestic 
mar~et after the effectivity of this Act shall be taxed under the proper classification thereof based on 
their suggested 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 
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!o 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 NEWLY 
INTRODUCED [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 wah 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 WINES [new brand] 
against the net retail price defined herein and determine the correct tax bracket to which NEWLY 
INTRODUCED WINES [a particular new brand of wines, as defined above,] shall be classified. 
After TWELVE (12) [the eighteen (18)] 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 [particular new brand o~ WINE 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 
I 
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between January 1, 1997 to 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.] 
["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 
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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.] 
"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 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. 
"Manufacturers and/OR importers of wines 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 oD wine[s] sold 
[at his establishment] for the three-month period immediately preceding. 
I 
"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/SHE shall be deported immediately after 
serving the sentence, without further proceedings for deportation." 
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SEC. 3. Section 143 of the National Internal Revenue Code, as amended by Republic Act No. 9334, is 
hereby further amended to read as follows: 
"SEC. 143. Fermented liquorS. - There shall be [levied, assessed and] collected an excise tax 
PER LITER OF VOLUME CAPACITY on beer, lager beer, ale, porter, and similar fermented liquors 
except tuba, basi, tapuyand similar fermented liquors EFFECTIVE MARCH 1, 2013 in accordance with 
the following schedule: 
"(a) If the net retail price (excluding the excise tax and value- added tax) per liter of volume 
capacity is FIFTY PESOS AND SIXTY CENTAVOS (P50.60) OR LESS [less than 
Fourteen pesos and fifty centavos (P14.50)], the tax shall be THIRTEEN PESOS AND 
SEVENTY-FIVE CENTAVOS (P13.75) [Eight pesos and twenty-seven centavos (P8.27)] 
per liter; AN D 
"(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) [Fourteen 
pesos and fifty centavos (P14.50) up to Twenty-two pesos (P22.00)j, the tax shall be 
EIGHTEEN PESOS AND EIGHTY CENTAVOS (P18.80) [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.] 
"PROVIDED, THAT ANY RECLASSIFICATION OF PRESENT CATEGORIES, FOR TAX 
PURPOSES. OF FERMENTED LIQUORS DULY REGISTERED FROM MARCH 1, 2013 TO 
FEBRUARY 28, 2015 WHICH WILL REDUCE THE TAX IMPOSED HEREIN, OR THE 
PAYMENT THEREOF SHALL BE PROHIBITED. 
["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 variant of that brand.] 
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["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 restaurant shall be subjected to the rate OF TWENTY EIGHT PESOS (P28,00) 
PERiLiTER [in paragraph (c) hereof], 
["New brands, as defined in immediately following paragraph, shall initially be classified 
according to their suggested net retail price,] 
"THE CORRESPONDING TAX RATES IMPOSED UNDER THIS SECTION SHALL BE 
INCREASED BY EIGHT PERCENT (8%) EVERY TWO (2) YEARS THEREAFTER STARTING 
MARCH 1, 2015 UNTIL MARCH 1, 2019 AND BY FOUR PERCENT (4%) ON MARCH 1,2020, 
"THE RECLASSIFICATION OF EXISTING FERMENTED LIQUORS SHALL BE BASED 
ON THE PRICE SURVEY TO BE CONDUCTED BY THE BUREAU OF INTERNAL REVENUE 
WITHIN THE MONTH OF DECEMBER IMMEDIATELY PRECEDING THE EFFECTIVITY OF THE 
NEW EXCISE TAX SCHEDULE: PROVIDED, THAT NEWLY INTRODUCED 
FERMENTED 
LIQUORS OR THOSE INTRODUCED IN THE MARKET AFTER THE EFFECTIVITY OF THE 
NEW EXCISE TAX SCHEDULE SHALL BE INITIALLY 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,] 
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"'Suggested 
net retail price,' shall mean the net retail price at which NEWLY 
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INTRODUCED [new brands, as defined above, of locally manufactured or imported] fermented 
liquors are intended by the BREWER [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 [new brand] against the net retail price defined herein and determine the 
correct tax bracket to which A NEWLY INTRODUCED FERMENTED LIQUOR [a particular new 
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brand of fermented liquor, as defined above,] shall be. classified, After TWELVE (12) [the eighteen 
(18)] 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 [particular new brand o~ 
fermented liquor[s] shall be 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 to 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 by 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 TEN (10) [twenty (20)) major supermarkets in Metro 
Manila (for [brands o~ fermented liquorS marketed nationally), excluding the amount intended to. 
cover the applicable excise tax and the value added tax. For FERMENTED LIQUORS [brands] 
which are marketed outside of Metro Manila, the 'net retail price' shall mean the price at Wllich the 
fermented liquor is sold in at least five (5) major supermarkets in the region excluding the amount 
intended to cover applicable excise tax and 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.] 
"WILLFUL UNDERSTATEMENT OF THE SUGGESTED NET RETAIL PRICE BY AS MUCH 
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AS FIFTEEN PERCENT (15%) OF THE ACTUAL NET RETAIL PRICE SHALL RENDER THE 
BREWER 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 existing brands of 
fermented liquor 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.] 
"Every brewer AND/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 third month thereafter, submit to the 
Commissioner a sworn statement of the volume of sales for each [particular brand oij fermented 
liquor sold [at his establishment] for the three-month period immediately preceding. 
"Any brewer 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 
be penalized by a summary cancellation or withdrawal of [his or] its perrnit to engage in business as 
I 
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/SHE shall be deported immediately after 
serving the sentence, without further proceedings for deportation." 
SEC. 4. Section 144 of the National Internal Revenue Code of 1997, as amended by Republic Act No. 
9334, is hereby further amended to read as follow: 
"SEC. 144. Tobacco Products. -- There shall be collected aN EXCISE tax of ONE PESO AND 
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SEVENTY-FIVE CENTAVOS (P1.75) [One peso (Pi ,00)] on each kilogram of the following products of 
tobacco EFFECTIVE MARCH 1,2013: 
"(a) Tobacco twisted by hand or reduced into a condition to be consumed in any manner other 
than the ordinary mode of drying and curing; 
"(b) Tobacco prepared or partially prepared with or without the use of any machine or 
instruments or without being pressed or sweetened except as otherwise provided 
hereunder; and 
"(c) Fine-cut shorts and refuse, scraps, clippings, cuttings, stems and sweepings of tobacco 
; except as otherwise provided hereunder, 
i"Stemmed leaf tobacco, tobacco prepared or partially prepared with or without the use of any 
machine or instrument or without being pressed or sweetened, fine cut shorts and refuse, scraps, 
clippings, cuttings, stems, midribs, and sweepings of tobacco resulting from the handling or 
stripping of whole leaf tobacco shall be transferred, disposed of, or otherwise sold, without any 
pre-payment of the excise tax herein provided for, if the same are to be exported or to be used in 
the manufacture of cigars, cigarettes, or other tobacco products on which the excise tax will 
eventually paid on the finished product, under such conditions as may be prescribed in the rules 
and regulations promulgated by the Secretary of Finance, upon recommendat'lon of the 
Commissioner, 
"On tobacco specially prepared for chewing so as to be unsuitable for use in any other 
manner, on each kilogram, ONE PESO AND FIFTY CENTAVOS (1,50) [Seventy-nine centavos 
(P0.79)]. 
"The rates of tax imposed under this Section shall be increased by EIGHT PERCENT (8%) [six 
percent (6%)] every two years THEREAFTER starting on MARCH 1,2015 UNTIL MARCH 1, 2019 
AND BY FOUR PERCENT (4%) ON MARCH 1,2020 [January 1,2007 until January 1,2011]. 
"Manufacturers and/OR importers of tobacco products shall, within thirty (30) days from the 
effectivity of this Act, and within the first five (5) days of every third month thereafter, subm'lt to the 
Commissioner a sworn statement of the volume of sales for each [particular brand on tobacco 
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product[s) sold [at their establishment) for the three-month period immediately preceding. 
"WILLFUL UNDERSTATEMENT OF THE SUGGESTED NET RETAIL PRICE BY AS MUCH AS 
FIFTEEN PERCENT (15%) OF THE ACTUAL NET RETAIL PRICE SHALL RENDER THE 
MANl,JFACTURER 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 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 cigars or cigarettes. 
"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/SHE shall be deported immediately after serving 
the sentence, without further proceedings for deportation. 
SEC. 5. Section 145 of the National Internal Revenue Code of 1997, as amended by Republic Act No. 
9334, is hereby further amended to read as follows: 
"SEC. 145. Cigars and Cigarettes. -
"(A) Cigars -There shall be levied, assessed and collected on cigars an ad valorem EXCISE tax 
based on the net retail price per cigar (excluding the excise tax and the value-added tax) in accordance 
, 
with the following schedule EFFECTIVE MARCH 1, 2013: 
I 
"(1) 
If the net retail price per cigar is Five hundred pesos (P500.00) or less!.] •• TWENTY 
PERCENT (20%) [ten percent (10%)]; and 
"(2) 
If the net retail price per cigar [(excluding the excise tax and the value-added tax)] is 
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more than Five hundred pesos (P500,OO)[.)-- ONE HUNDRED PESOS (P100,OO) [Fifty 
pesos (P50,OO)) plus TWENTY-FIVE PERCENT (25%) [fifteen percent (15%)] of the net 
retail price in excess of Five hundred pesos, 
"THE NET RETAIL PRICE CUT-OFFS SHALL BE INCREASED BY EIGHT PERCENT (8%) 
EVERY TWO (2) YEARS THEREAFTER STARTING MARCH 1,2015 UNTIL MARCH 1,2019 AND 
BY FOUR PERCENT (4%) ON MARCH 1,2020, 
"THE RECLASSIFICATION OF EXISTING CIGARS SHALL BE BASED ON THE PRICE 
SURVEY TO BE CONDUCTED BY THE BUREAU OF INTERNAL REVENUE WITHIN THE 
MONTH OF DECEMBER IMMEDIATELY PRECEDING THE EFFECTIV1TY OF THE NEW EXCISE 
TAX SCHEDULE: PROVIDED, THAT NEWLY INTRODUCED CIGARS OR THOSE INTRODUCED 
IN THE MARKET AFTER THE EFFECTIVITY OF THE NEW EXCISE TAX SCHEDULE SHALL BE 
INITIALLY CLASSIFIED ACCORDING TO THEIR SUGGESTED NET RETAIL PRICE, 
"(B) Cigarettes Packed by Hand, -
ON CIGARETTES PACKED BY HAND, t[T)here shall be 
[levied, assessed and) collected AN EXCISE TAX IN ACCORDANCE WITH THE FOLLOWING 
SCHEDULE [on cigarettes packed by hand a tax at the rates prescribed below): 
"Effective on MARCH 1, 2013[,] -- SIX PESOS (P6,00) [January 1, 2005, Two pesos 
(P2,00)] per pack; 
"Effective on MARCH 1, 2015[,)-- SIX PESOS AND FORTY-EIGHT CENTAVOS (P6.48) 
[January 1,2007, Two pesos and twenty-three centavos (P2,23)] per pack; 
"Effective on MARCH 1,2017[,] -- SEVEN PESOS (P7,00) [January 1, 2009, Two pesos 
and forty-seven centavos (P2,47)) per pack; 
"Effective on MARCH 1, 2019[,) -- SEVEN PESOS AND FIFTY-SIX CENTAVOS (P7,56) 
[January 1, 2011, Two pesos and seventy-two centavos (P2.72)] per pack; AND 
"EFFECTIVE ON MARCH 1, 2020 -- SEVEN PESOS AND EIGHTY-SIX CENTAVOS 
(P7,86) PER PACK, 
"Duly registered [or existing brands oij cigarettes [or new brands thereoij packed by hand shall only 
be packed in thirties, 
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"(C) 
Cigarettes Packed by Machine. -
ON CIGARETTES PACKED BY MACHINE, AN 
EXCISE TAX [There] shall be [levied, assessed and] collected IN ACCORDANCE WITH THE 
FOLLOWING SCHEDULES [on cigarettes packed by hand a tax at the rates prescribed below]: 
"1. 
EFFECTIVE MARCH 1, 2013 -
a) THOSE ON WHICH AN EXCISE TAX OF LESS THAN SEVEN PESOS AND FIFTY-SIX 
CENTAVOS (P7.56) IS COLLECTED IN 2012 -- SIX PESOS (P6.00) PER PACK; 
b) THOSE ON WHICH AN EXCISE TAX OF SEVEN PESOS AND FIFTY-SIX CENTAVOS 
(P7.56) BUT LESS THAN TWELVE PESOS (P12.00) IS COLLECTED IN 2012 -- TEN 
PESOS (P10.00) PER PACK; AND 
c) 
THOSE ON WHICH AN EXCISE TAX OF TWELVE PESOS (P12.00) OR MORE IS 
COLLECTED IN 2012 -- FOURTEEN PESOS (P14.00) PER PACK. 
''ON NEWLY INTRODUCED CIGARETTES WITHIN THE 
PERIOD MARCH 1, 2013 TO 
FEBRUARY 28, 2015, THERE SHALL BE COLLECTED AN EXCISE TAX IN ACCORDANCE WITH 
THE NET RETAIL PRICE (EXCLUDING THE EXCISE TAX AND THE VALUE-ADDED TAX) PER 
PACK AND WITH THE FOLLOWING SCHEDULE BELOW: 
a) LESS THAN FIFTEEN PESOS (P15.00) - SIX PESOS (P6.00) PER PACK; 
b) 
FIFTEEN PESOS (P15.00) UP TO EIGHTEEN PESOS (P18.00) -- TEN PESOS (P10.00) 
PER PACK; AND 
c) 
MORE THAN EIGHTEEN PESOS (P18.00) -- FOURTEEN PESOS (P14.00) PER PACK. 
"2. EFFECTIVE MARCH 1, 2015 AN EXCISE TAX SHALL BE COLLECTED IN ACCORDANCE 
WITH THE NET RETAIL PRICE (EXCLUDING THE EXCISE TAX AND THE VALUE-ADDED TAX) 
PER PACK AND WITH THE FOLLOWING SCHEDULE: 
a) 
LESS THAN FIFTEEN PESOS (P15.00) -- SEVEN PESOS AND FIFTY CENTAVOS (P7.50) 
PER PACK; 
b) 
FIFTEEN PESOS (P15.00) UP TO EIGHTEEN PESOS (P18.00) -- TEN PESOS AND 
FIFTY CENTAVOS (P10.50) PER PACK; AND 
c) 
MORE THAN EIGHTEEN PESOS (P18.00) --
FOURTEEN PESOS AND FIFTY 
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CENTAVOS (P14.50) PER PACK. 
"THE RECLASSIFICATION OF EXISTING CIGARETTES PACKED BY MACHINE SHALL BE 
BASED ON THE PRICE SURVEY TO BE CONDUCTED BY THE BUREAU OF INTERNAL 
REVENUE WITHIN 
THE MONTH OF DECEMBER 2014. 
NEWLY INTRODUCED 
CIGARETTES PACKED BY MACHINE OR THOSE INTRODUCED IN THE MARKET AFTER 
FEBRUARY 28, 2015 UP TO FEBRUARY 28, 2017 SHALL BE INITiALLY CLASSIFIED 
ACCORDING TO THEIR SUGGESTED NET RETAIL PRICE. 
"3. EFFECTIVE MARCH 1,2017 AN EXCISE TAX SHALL BE COLLECTED IN ACCORDANCE 
WITH THE NET RETAIL PRICE (EXCLUDING THE EXCISE TAX AND THE VALUE-ADDED TAX) 
PER PAcK AND WITH THE FOLLOWING SCHEDULE 
a) 
LESS THAN SIXTEEN PESOS AND TWENTY CENTAVOS (P16.20) -- NINE PESOS 
(P9.00) PER PACK; 
b) 
SIXTEEN PESOS AND TWENTY CENTAVOS (P16.20) UP TO NINETEEN PESOS AND 
FORTY-FOUR CENTAVOS (P19.44) -- ELEVEN PESOS (P11.00) PER PACK; AND 
c) 
MORE THAN NINETEEN PESOS AND FORTY-FOUR CENTAVOS (P19.44) -- FIFTEEN 
PESOS (P15.00). 
"THE RECLASSIFICATION OF EXISTING CIGARETTES PACKED BY MACHINE SHALL BE 
BASED ON THE PRICE SURVEY TO BE CONDUCTED BY THE BUREAU OF INTERNAL 
REVENUE WITHIN THE MONTH OF DECEMBER 2016. NEWLY INTRODUCED CIGARETTES 
PACKED BY MACHINE OR THOSE INTRODUCED IN THE MARKET AFTER FEBRUARY 28 , 
2017 UP TO FEBRUARY 28, 2019 SHALL BE INITIALLY CLASSIFIED ACCORDING TO THEIR 
SUGGESTED NET RETAIL PRICE. 
"4. EFFECTIVE MARCH 1, 2019 AN EXCISE TAX SHALL BE COLLECTED IN ACCORDANCE 
WITH THE NET RETAIL PRICE (EXCLUDING THE EXCISE TAX AND THE VALUE-ADDED TAX) 
PER PACK AND WITH THE FOLLOWING SCHEDULE: 
a) LESS THAN SEVENTEEN PESOS AND FIFTY CENTAVOS (P17.50) -- TEN PESOS AND 
FIFTY CENTAVOS (P10.50) PER PACK; 
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b) 
SEVENTEEN PESOS AND FIFTY CENTAVOS (P17.50) UP TO TWENTY-ONE PESOS 
(P21.00) -- ELEVEN PESOS AND FIFTY CENTAVOS (P11.50) PER PACK; AND 
c) 
MORE THAN TWENTY-ONE PESOS (P21.00) --
FIFTEEN PESOS AND FIFTY 
CENTAVOS (P15.50) PER PACK. 
"lrHE RECLASSIFICATION OF EXISTING CIGARETTES PACKED BY MACHINE SHALL 
BE BASED ON THE PRICE SURVEY TO BE CONDUCTED BY THE BUREAU OF INTERNAL 
REVENUE WITHIN THE MONTH OF DECEMBER 2018. NEWLY INTRODUCED CIGARETTES 
PACKED BY MACHINE OR THOSE INTRODUCED IN THE MARKET AFTER FEBRUARY 28, 
2019 UP TO FEBRUARY 29, 2020 SHALL BE INITIALLY CLASSIFIED ACCORDING TO THEIR 
SUGGESTED NET RETAIL PRICE. 
"5. EFFECTIVE MARCH 1, 2020, AN EXCISE TAX SHALL BE COLLECTED IN ACCORDANCE 
WITH THE NET RETAIL PRICE (EXCLUDING THE EXCISE TAX AND THE VALUE-ADDED TAX) 
PER PACK AND WITH THE FOLLOWING SCHEDULE: 
a) 
TWENTY-ONE PESOS AND EIGHTY-FOUR CENTAVOS (P21.84) OR LESS -- TWELVE 
PESOS (P12.00) PER PACK; 
b) 
MORE THAN TWENTY-ONE PESOS AND EIGHTY-FOUR CENTAVOS (P21.84) --
SIXTEEN PESOS (P16.00) PER PACK. 
"THE RECLASSIFICATION OF EXISTING CIGARETTES PACKED BY MACHINE SHALL BE 
BASED ON THE PRICE SURVEY TO BE CONDUCTED BY THE BUREAU OF INTERNAL 
REVENUE WITHIN THE MONTH OF DECEMBER 2019. NEWLY INTRODUCED CIGARETTES 
PACKED BY MACHINE OR THOSE INTRODUCED IN THE MARKET AFTER FEBRUARY 129 , 
2020 SHALL BE INITIALLY CLASSIFIED ACCORDING TO THEIR SUGGESTED NET RETAIL 
PRICE." 
, 
["(1) If the net retail price (excluding the excise tax and the value-added tax) is below Five pesos 
I 
(P5.00) per pack, the tax shall be: 
"Effective on January 1, 2005, Two pesos (P2.00) per pack; 
"Effective on January 1, 2007, Two pesos and twenty-three centavos (P2.23) per pack; 
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"Effective on January 1,2009, Two pesos and forty-seven centavos (P2.47) per pack; 
and 
"Effective on January 1,2011, Two pesos and seventy-two centavos (P2.72) per pack,] 
["(2) If the net retail price (excluding the excise tax and the value-added tax) is Five pesos 
(P5,00) but does not exceed Six pesos and fifty centavos (P6,50) per pack, the tax shall be: 
"Effective on January 1, 2005, Six pesos and thirty-five centavos (P6,35) per pack; 
"Effective on January 1,2007, Six pesos and seventy-four centavos (P6.74) per pack; 
"Effective on January 1, 2009, Seven pesos and fourteen centavos (P7,14) per pack; and 
"Effective on January 1,2011, Seven pesos and fifty-six centavos (P7,56) per pack,] 
["(3) IUhe net retail price (excluding the excise tax and the value-added tax) exceeds Six pesos 
and fifty centavos (P6,50) but does not exceed Ten pesos (P10,00) per pack, the tax shall be: 
"Effective on January 1, 2005, Ten pesos and thirty-five centavos (P10,35) per pack; 
"Effective on January 1, 2007, Ten pesos and eighty-eight centavos (P1 0,88) per pack; 
"Effective on January 1, 2009, Eleven pesos and forty-three centavos (P11.43) per pack,; 
and 
"Effective on January 1, 2011, Twelve pesos (P12,00) per pack,] 
["(4 ) 
If the net retail price (excluding the excise tax and the value-added tax) is above Ten 
pesos (P10,00) per pack, the tax shall be: 
"Effective on January 1,2005, Twenty-five pesos (P25,00) per pack; 
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"Effective on January 1,2007, Twenty-six pesos and six centavos (P26,06) per pack; 
"Effective on January 1, 2009, Twenty-seven pesos and sixteen centavos (P27,16) per pack; 
and 
"Effective on January 1,2011, Twenty-eight pesos thirty centavos (P28,30) per pack,] 
["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 variant of that brand,] 
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["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.] 
"Duly registered [or existing brands on cigarettes [or new brands thereon packed by machine 
shall only be packed in twenties. 
["Any downward reclassification of present categories, for tax purposes, of existing brands of 
cigars and cigarettes 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.] 
["New brands, as defined in 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. 1 
'''Suggested net retail price,' shall mean the net retail price at which NEWLY 
INTRODUCED [new brands, as defined above, of locally manufactured or imported] cigarettes 
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 
regi6nal 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 
CIGARETTES [new brand] against the net retail price defined herein and determine the correct 
tax bracket under which [a] NEWLY INTRODUCED [particular new brand on cigarettes!. as 
defined above,] shall be classified. After TWELVE (12) [the eighteen (18)] 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 under which [a] NEWLY INTRODUCED [particular new brand on Cigarettes shall be 
classified. [: Provided, however, That brands of cigarettes 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 to December 31, 
2003 shall not be revised except by an act of Congress.] 
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'''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 rnean the price at 
which the cigarettes is sold on retail in at least TEN (10) [twenty (20)] rnajor superrnarkets in 
Metro Manila (for [brands o~ cigarettes marketed nationally), excluding the amount intended to 
cover the applicable excise tax and the value added tax. For CIGARETTES [brands] which are 
marketed outside of Metro Manila, the 'net retail price' shall mean the price at which the 
cigarettes is sold in at least five (5) major supermarkets in the region excluding the amount 
intended to cover applicable excise tax and value-added tax. 
I 
["The classification of each brand of cigarettes based on its average net retail price as of 
October 1,1996, as set forth in Annex 'D', including the classification of brands for the same 
products which, although not set forth in said Annex 'D', 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.] 
"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 OR IMPORTER OF CIGARS AND/OR CIGARETTES 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. 
"Manufacturers and/OR importers of cigars and/OR cigarettes 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 
o~ cigar[s] and/or cigarette[s] sold [at his establishment] for the three-month period immediately 
preceding. 
"Any manufacturer or importer OF CIGARS AND/OR CIGARETTES who, in violation of this 
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Section, knowingly misdeclares or misrepresents in [his or) its sworn statement herein required 
any pertinent data or information shall be penalized by summary cancellation or withdrawal of 
[his or) its permit to engage in business as manufacturer or importer of cigars andlOR cigarettes. 
"~ny corporation, association or partnership liable for any of the acts or omissions in violation 
of t~is 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, helSHE shall be deported immediately after 
serving the sentence, without further proceedings for deportation." 
SEC. 6. Section 131, Subsection A of the National Internal Revenue Code of 1997, as amended by 
Republic ActNo. 9334, is hereby further amended as follows: 
"SEC. 131. Payment of Excise Taxes on Imported Articles. -
"(A) x x x 
"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 to 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 
, 
SUbip Special Economic and Freeport Zone, created under Republic Act No. 7227; the Cagayan 
Special Economic Zone 
and Freeport, created under the Republic Act No. 7922; and 
the 
Zamboanga City Special Economic Zone, created Republic Act No.7903, and such other 
26 
freeports as may hereafter be established or created by law: Provided, 
further, 
That 
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NOTWITHSTANDING THE PROVISIONS OF REPUBLIC ACT NOS. 9400 AND 9593, 
importations of cigars and cigarettes, distilled spirits, fermented liquors and wines made 
directly bya government-owned-and-operated duty-free shop, like the Duty-free Philippines 
(DFP), shall be exempted from all applicable duties only. x x x 
"Articles confiscated shall be disposed of USING THE MOST ENVIRONMENT ALL Y 
FRIENDLY METHOD AVAILABLE AND 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. 
"x x x. 
"(B) x x x." 
SEC. 7. Section 288 of the National Internal Revenue Code of 1997, as amended by Republic Act No. 
9334, is hereby further amended by deleting Paragraphs (B) and (C), to read as follows: 
"SEC. 288. Disposition of Incremental Revenues. -
(A) 
Incremental Revenues from Republic Act No. 7660. - x x x. 
, 
[(~) Incremental Revenues from Republic Act No. 8240. - Fifteen percent (15%) of the 
incremental revenue collected from the excise tax on tobacco products under RA No. 8240 
(November 22, 1996), shall be allocated and divided among the provinces producing burley and 
native tobacco in accordance with the volume of tobacco leaf production. The fund shall be 
exclusively utilized for programs in pursuit of the following objectives:] 
[(1) 
Cooperative projects that will enhance better quality of agricultural products and increase 
income and productivity of farmers; 
(2) 
Livelihood projects, particularly the development of alternative farming system to 
enhance farmer's income; and 
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--- --------------------------------------------------------
(3) 
Agro industrial projects that will enable tobacco farmers to be involved in the 
management and subsequent ownership of projects, such as post harvest and secondary 
processing like cigarette manufacturing and by-product utilization.] 
[The Department of Budget and Management, in consultation with the Oversight Committee 
created under said R.A. No. 8240, shall issue the corresponding rules and regulations governing the 
allocation and disbursement of this fund.] 
["(C) Incremental Revenues from the Excise Tax on Alcohol and Tobacco Products. -
"(1) 
Two and a half percent (2.5%) of the incremental revenue from the excise tax on alcohol 
and tobacco products starting January 2005 shall be remitted directly to the Philippine Health 
Insurance Corporation for the purpose of meeting and sustaining the goal of universal coverage of 
the National Health Insurance Program; and 
"(2) 
Two and a half percent (2.5%) of the incremental revenue from the excise tax on alcohol 
and tobacco products starting January 2005 shall be credited to the account of the Department of 
Health and constituted as a trust fund for its disease prevention program.] 
["the earmarking provided under this provision shall be observed for five (5) years starting 
from January 2005."] 
"(B)[(D)] x x x. 
"(C)[(E)]x x x." 
SEC. 8. Section 289 of the National Internal Revenue Code of 1997, as amended by Republic Act No. 
9334, is hereby further amended, to read as follows: 
"SEC. 289. -
DISPOSITION OF EXCISE TAX COLLECTIONS FROM ALCOHOL AND 
TOBACCO PRODUCTS. -
"(A) Special Financial Support to Beneficiary Provinces Producing Virginia Tobacco 
UNDER. REPUBLIC ACT NO. 7171. -- The financial support given by the National Government 
for the beneficiary provinces shall be constituted and collected from the proceeds of fifteen 
percent (15%) of the excise taxes on locally manufactured Virginia-type of cigarettes. 
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"The funds allotted shall be divided among the beneficiary provinces pro-rata according to 
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the volume of Virginia tobacco production. 
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"Provinces producing Virginia tobacco shall be the beneficiary provinces under Republic 
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Act No. 7171: 
Provided, however, That to qualify as beneficiary under RA. No. 7171, a 
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province must have an average annual production of Virginia leaf tobacco in an amount not less 
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than one million kilos: Provided, further, That the Department of Budget and Management 
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(DBM) shall each year determine the beneficiary provinces and their computed share of the 
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funds under RA. No. 7171, referring to the National Tobacco Administration (NTA) records of 
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tobacco acceptances, at the tobacco trading centers for the immediate past year. 
, 
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I"The Secretary of Budget and Management is hereby directed to retain annually the said 
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funds equivalent to fifteen percent (15%) of excise taxes on locally manufactured Virginia type 
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cigarettes to be remitted to the beneficiary provinces qualified under RA. No. 7171. 
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"The provision of existing laws to the contrary notwithstanding, the fifteen percent (15%) 
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share from government revenues mentioned in RA. No. 7171 and due to the Virginia tobacco-
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producing provinces shall be directly remitted to the provinces concerned. 
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"Provided, That this Section shall be implemented in accordance with the guidelines of 
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Memorandum Circular No. 61-A dated November 28, 1993, which amended Memorandum 
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Circular No. 61, entitled "Prescribing Guidelines for Implementing Republic Act No. 7171", 
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dated January 1, 1992. 
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"Provided, further, That in addition to the local government units mentioned in the above 
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circular, the concerned officials in the province shall be consulted as regards the identification of 
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projects to be financed. 
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"(B) 
SPECIAL FINANCIAL SUPPORT TO BENEFICIARY PROVINCES PRODUCING 
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BURLEY AND NATIVE TOBACCO. -
AN 
AMOUNT 
OF 
ONE 
BILLION 
PESOS 
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(Pi ,000,000,000) FROM THE EXCISE TAX COLLECTION ON TOBACCO PRODUCTS SHALL 
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BE ANNUALLY ALLOCATED AND DIVIDED AMONG THE PROVINCES PRODUCING 
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BURLEY AND NATIVE TOBACCO IN ACCORDANCE WITH THE VOLUME OF TOBACCO 
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LEAF PRODUCTION, THE FUND SHALL BE EXCLUSIVELY UTILIZED FOR PROGRAMS TO 
PROMOTE ECONOMICALLY VIABLE ALTERNATIVES FOR TOBACCO FARMERS AND 
WORKERS SUCH AS: 
"(1) COOPERATIVE PROJECTS THAT WILL ENHANCE BETTER QUALITY OF 
ApRICUL TURAL PRODUCTS AND INCREASE INCOME AND PRODUCTIVITY OF 
FARMERS; 
"(2) LIVELIHOOD 
PROJECTS, 
PARTICULARLY 
THE 
DEVELOPMENT OF 
ALTERNATIVE FARMING SYSTEM TO ENHANCE FARMERS' INCOME; 
"(3) AGRO INDUSTRIAL PROJECTS THAT WILL ENABLE TOBACCO FARMERS 
TO BE INVOLVED IN THE MANAGEMENT AND SUBSEQUENT OWNERSHIP OF 
PROJECTS, SUCH AS POST HARVEST AND SECONDARY PROCESSING LIKE 
CIGARETTE MANUFACTURING AND BY-PRODUCT UTILIZATION, 
"(4) PROGRAMS THAT WILL PROVIDE INPUTS, TRAINING, AND OTHER 
SUPPORT FOR TOBACCO FARMERS WHO SHIFT TO PRODUCTION OF 
AGRICULTURAL PRODUCTS OTHER THAN TOBACCO; 
"(5) 
PROGRAMS THAT WILL PROVIDE FINANCIAL SUPPORT FOR 
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TOBACCO FARMERS WHO ARE DISPLACED OR WHO CEASE TO PRODUCE 
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TOBACCO VOLUNTARILY; AND 
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"(6) COOPERATIVE PROGRAMS TO ASSIST TOBACCO FARMERS 
IN 
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PLANTING ALTERNATIVE CROPS OR IMPLEMENTING OTHER LIVELIHOOD 
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PROJECTS, 
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' "THE DEPARTMENT OF BUDGET AND MANAGEMENT (DBM), IN CONSULTATION 
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WITH THE DEPARTMENT OF AGRICULTURE (DA), SHALL ISSUE 
RULES AND 
REGULATIONS GOVERNING THE ALLOCATION AND DISBURSEMENT OF THIS FUND, 
NohATER THAN THIRTY (30) DAYS FROM THE EFFECTIVITY OF THIS ACT, 
"(C) SPECIAL FINANCIAL SUPPORT FOR HEAL TH CARE PROGRAMS, -
"(1) AN AMOUNT EQUIVALENT TO FORTY PERCENT (40%) OF THE TOTAL EXCISE 
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TAX COLLECTION FROM ALCOHOL AND TOBACCO PRODUCTS SHALL BE ANNUALLY 
ALLOCATED AND REMITTED DIRECTLY TO THE PHILIPPINE HEALTH INSURANCE 
CORPORATION (PHILHEALTH) FOR THE PURPOSE OF MEETING AND SUSTAINING THE 
GOAL OF UNIVERSAL COVERAGE OF THE NATIONAL HEALTH INSURANCE PROGRAM: 
PROVIDED, THAT SAID AMOUNT SHALL NOT BE USED FOR PERSONNEL SERVICES, AS 
WELL AS FOR TRAVEL, TRANSPORTATION OR REPRESENTATION EXPENSES, OR 
PURCHASE OF MOTOR VEHICLES. 
"(2) AN AMOUNT EQUIVALENT TO TEN PERCENT (10%) OF THE TOTAL EXCISE TAX 
COLLECTION FROM ALCOHOL AND TOBACCO PRODUCTS SHALL BE ANNUALLY 
ALLOCATED AND REMITTED DIRECTLY TO THE DEPARTMENT OF HEALTH (DOH) TO BE 
DISTRIBUTED AS FOLLOWS: 
• FIFTY PERCENT (50%) FOR REGIONAL HOSPITALS; AND 
• FIFTY PERCENT (50%) FOR DISTRICT HOSPITALS OPERATED BY LOCAL 
GOVERNMENT UNITS (LGUs). 
"(3) AN AMOUNT OF ONE HUNDRED MILLION PESOS (P100,000,000.00) FROM THE 
TOTAL EXCISE TAX COLLECTION FROM ALCOHOL AND TOBACCO PRODUCTS TO BE 
DIRECTLY REMITTED TO AND ADMINISTERED BY THE DEPARTMENT OF HEALTH (DOH) 
SHALL BE ANNUALY ALLOCATED TO FINANCE A PUBLIC INFORMATION AND 
EDUCATION PROGRAM AIMED TO PROVIDE HEALTH AWARENESS INFORMATION ON 
THE 'DANGERS OF SMOKING AND DRINKING. 
"(D) SPECIAL FINANCIAL SUPPORT FOR DISPLACED WORKERS/FARMERS IN THE 
ALCOHOL AND TOBACCO INDUSTRY. --
"AN AMOUNT OF ONE HUNDRED MILLION PESOS (Pi 00,000,000) FROM THE TOTAL 
EXCISE TAX COLLECTION FROM ALCOHOL AND TOBACCO PRODUCTS TO BE 
DIRECTLY REMITTED TO AND ADMINISTERED BY THE DEPARTMENT OF LABOR AND 
EMPLOYMENT (DOLE) SHALL BE ALLOCATED TO FINANCE PROGRAMS CONNECTING 
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WORKERS TO LIVELIHOOD RESOURCES, SOCIAL PROTECTION BENEFITS AND TO 
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TRAINING AND EDUCATION SCHOLARSHIP AND EMPLOYMENT OPPORTUNITIES. 
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"THE REMAINING BALANCE OF THE TOTAL REVENUES COLLECTED FROM THE 
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EXCISE TAXES ON ALCOHOL AND TOBACCO PRODUCTS UNDER THIS ACT SHALL 
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ACCRUE TO THE GENERAL FUND." 
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SEC. 
9. 
Implementing Rules and Regulations. - The Secretary of Finance shall, upon the 
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recommendation of the Commissioner of Internal Revenue, and in coordination with the Department of Budget 
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and Management (DBM), the Department of Health (DOH), and the National Tobacco Administration (NTA), 
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promulgate not later than thirty (30) days upon the effectivity of this Act the necessary Rules and Regulations 
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for its effective implementation. 
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SEC. 
10. Separability Clause. -
If any provision of this Act is subsequently declared invalid or 
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unconstitutional, other provisions hereof which are not affected thereby shall remain in full force and effect. 
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SEC. 
11. Repealing Clause. - All laws, acts, presidential decrees, executive orders, issuances, 
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presidential proclamations, rules and regulations or parts thereof which are contrary to and inconsistent with 
, 
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any provis,ion of this Act are hereby repealed, amended or modified accordingly. 
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SEC. 12. Effectivity. - This Act shall take effect fifteen (15) days after its complete publication either in the 
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Official Gazette, or in at least two (2) newspapers of general circulation. 
Approved, 
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