SEVENTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
)
Third Regular Session 
)
S E N A T E
l-j . r  
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-  i »»-: - .
•19 
HAY 27 P I :12
n
RELl- .
COMMITTEE Rl l'ORT No.
r7 i a
Submitted by the Committee on Ways and Means on 41A U 2 J-2 (1 1 9
Re: Senate Bill No. _l2233
Recommending its approval in substitution of Senate Bill Nos. 1599, 1605 and 2177 taking into 
consideration House Bill No. 8677.
Sponsor: Sen. Sonny Angara
MR. PRESIDENT:
The Committee on Ways and Means to which were referred Senate Bill No. 1599, introduced by 
Senator Emmanuel D. Pacquiao, entitled:
“AN ACT
RAISING THE EXCISE TAX ON TOBACCO PRODUCTS AND AMENDING FOR 
THE 
PURPOSE 
PERTINENT SECTIONS OF THE NATIONAL INTERNAL 
REVENUE CODE, AS AMENDED”
S.B. No. 1605, introduced by Senator Joseph Victor G. Ejercito, entitled:
“AN ACT
INCREASING THE EXCISE TAX ON TOBACCO PRODUCTS AND AMENDING 
FOR THE PURPOSE SECTION 145 OF REPUBLIC ACT NO. 8424, OTHERWISE 
KNOWN AS THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS 
AMENDED BY REPUBLIC ACT NO. 9334 AND REPUBLIC ACT NO. 10351, AND 
FOR OTHER PURPOSES”
S.B. No. 2177, introduced by Sen. Win Gatchalian, entitled:
“AN ACT
AN ACT INCREASING THE EXCISE TAX ON TOBACCO PRODUCTS AND 
AMENDING FOR THE PURPOSE SECTION 145 OF REPUBLIC ACT NO. 8424, 
OTHERWISE KNOWN AS H IE “TAX REFORM ACT OF 1997”, AS 
.MENDED in ' 
REPUBLIC ACT NO. 9334 AND REPUBLIC ACT NO. 9334 AND REPUBLIC ACT 
NO. 10351, AND FOR OTHER PURPOSES”


and House Bill 8677, introduced by Representatives Salceda, D.L. Tan, et al., entitled:
“AN ACT
INCREASING THE EXCISE TAX RATE ON TOBACCO PRODUCTS, AMENDING 
FOR THE PURPOSE SECTION 145 OF THE NATIONAL INTERNAL REVENUE 
CODE OF 1997, AS AMENDED BY REPUBLIC ACT. NO. 10963”
has considered the same and has the honor to report these back to the Senate with the recommendation that 
the attached bill. Senate Bill No.________, prepared by the Committee, entitled;
“AN ACT
INCREASING THE EXCISE TAX ON TOBACCO PRODUCTS, THE PENALTIES 
FOR VIOLATIONS OF PROVISIONS ON ARTICLES SUBJECT TO EXCISE TAX,
AND EARMARKING INCREMENTAL TOBACCO EXCISE TAX FOR HUMAN 
RESOURCE DEVELOPMENT PROGRAMS FOR HEALTH PROFESSIONALS, 
AMENDING FOR THIS PURPOSE SECTIONS 145, 164, 260, 262, 263, 265 AND 
288(C) OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS 
AMENDED BY REPUBLIC ACT NO. 10963, AND FOR OTHER PURPOSES
be approved in substitution of Senate Bill Nos. 1599, 1605 and 2177 taking into consideration House Bill No. 
with Senators Pacquiao, JV Ejercito, Gatchalian, and Angara, as authors thereof
Respectfully Submitted:
NNY^NGARA
Chairperson
Vicc-Chairpcrsons
LOR&N=Br^EGARDA
JOEl/ VILLANUEVA
PAOLO BENIGNO “BAM” AQUINO IV
Members
RICHARD J. GORDON
GRACE POE


JOSEPH VICTOR G. EJERCITO
/fM  ' //
MARTA LOUR^:S NANCY S. BINAY
GATCHALIAN 
J"*! RANCIS “CHIZ” G. ESCUDERO
/O f
%
PANF/^L^ohvl LACSON
ERANCI
O” PANGILINAN
ANTONIO I RILLANES IV
RISA HONTIVEROS jj
j> r^W-e
AQUILINO “KOKO” PIMENTEL III
Ex-Off'icio Members
MIGUEL “MIGZ” F. ZUBIRI
Majority Leader
ANKLIN M. DRILON
/ Minority Leader
^ L P H  G /REG TO  
Sen me President Pro-Tempore
VICENI E C. SOTTO HI
President
Senate of the Philippines


SEVENTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
)
Tliirrl Regular Session 
)
r/.- ■
SENATE 
S. No.
(In Substitution of S.B. Nos. 1599,1605 and 2177 taking into ct^fe'idetation
H.B. No. 8677)
OPffi; ol tl)i
■19 
HAY 27 P I :12
Prepared by the Committee on Ways and Means with Senators 
Pacquiao, JV Ejercito, Gatchalian, and Angara as authors
AN ACT
INCREASING THE EXCISE TAX ON TOBACCO PRODUCTS, THE PENALTIES 
TOR VIOLATIONS OF PROVISIONS ON ARTICLES SUBJECT TO EXCISE TAX, 
AND EARMARKING INCREMENTAL TOBACCO EXCISE TAX FOR HUMAN 
RESOURCE DEVELOPMENT PROGRAMS FOR HEALTH PROFESSIONALS, 
AMENDING FOR THIS PURPOSE SECTIONS 145, 164, 260, 262, 263, 265 AND 
288(C) OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED 
BY REPUBLIC ACT NO. 10963, AND FOR OTHER PURPOSES
Be it enncted by the Semite mid House of Represeutiitives of t)ie Philippines in Congress 
assembled:
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SECTION 1. Section 145 of the National Internal Revenue Code of 1997, as
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amended by Republic Act No. 10963, is hereby further amended to read as follows:
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"SEC. 145. Cigars and Cigarettes. -
A 
"(A) Cigars. - There shall be levied, assessed and collected on cigars
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an excise tax in accordance with the following schedule:
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"(1) Effective on January 1, 2013
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"(a) 
An ad valorem tax equivalent to twenty percent (20%) of the
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net retail price (excluding the excise tax and the value-added
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tax) per cigar; and
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"(b) In addition to the ad valorem tax herein imposed, a specific tax
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of Five pesos (P5.00) per cigar.
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"(2) In addition to the ad valorem tax herein imposed, the specific
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tax rate of Five pesos (P5.00) imposed under this subsection shall bo


increased by [four] FIVE percent [(4%)] 5% effective on January 1, [2014]
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2024 through revenue regulations issued by the Secretary of Finance.
"'NET RETAIL PRICE' SHALL MEAN THE PRICE AT WHICH 
THE CIGAR IS SOLD ON RETAIL IN AT LEAST FIVE (5) MAJOR 
SUPERMARKETS IN METRO MANILA (FOR BRANDS OF CIGAR 
MARKETED 
NATIONALLY), 
EXCLUDING 
THE 
AMOUNT 
INTENDED TO COVER THE APPLICABLE EXCISE TAX AND THE 
VALUE-ADDED TAX. FOR CIGARS WHICH ARE MARKETED ONLY 
OUTSIDE METRO MANILA, THE 'NET RETAIL PRICE' SHALL 
MEAN TFIE PRICE AT WHICH THE CIGAR 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 BE PROVIDED 
BY THE MANUFACTURER OR IMPORTER 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 BUREAU OF INTERNAL 
REVENUE (BIR), AND SHALL EXCLUDE RETAIL OUTLETS OR 
KIOSKS, CONENIENCE 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 CIGAR IS NOT SOLD IN MAJOR 
SUPERMARKETS, THE PRICE SURVEY CAN BE CONDUCTED IN


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RETAIL OUTLETS WHERE SAID CIGAR IS SOLD IN METRO 
MANILA OR THE REGION, AS THE CASE MAY BE, UPON 
DETERMINATION 
OF THE COMMISSIONER 
OF INTERNAL 
REVENUE.
"THE NET RETAIL PRICE SHALL BE VALIDATED BY THE 
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 
CREATED UNDER REPUBLIC ACT NO. 8240.
"(B) Cigarettes Packed by Hand. - There shall be levied, assessed and 
collected on cigarettes packed by hand an excise tax based on the 
following schedules;
"[Effective on January 1, 2018 until June 30, 2018, Tliii'ty two pesos 
and fifty centavos (P32.50) per pack;
"Effective on July 1, 2018 until December 31, 2019, Thirty five pesos 
(P35.00) per pack;
"Effective on January 1, 2020 until December 31, 2021, Thirty seven 
pesos and fifty centavos (P37.50) per pack;
"Effective on January 1, 2022 until December 31, 2023, Forty pesos 
(P40.00) per pack;
The rates of tax imposed under this subsection shall be increased 
by four percent (4%) every year effective on January 1, 2024, through 
revenue regulations issued by the Secretary of Finance.]
"EFFECTIVE ON JANUARY 1, 2020, FORTY-FIVE PESOS 
(P45.00) PER PACK;


'EFFECTIVE ON JANUARY 1, 2021, FIFTY PESOS (P50.00) PER
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PACK;
"EFFECTIVE ON JANUARY 1, 2022, FIFTY-FIVE PESOS (P55.00) 
PER PACK;
"EFFECTIVE ON JANUARY 1, 2023, SIXTY PESOS (P60.00) PER 
PACK;
"THE RATES OF TAX IMPOSED UNDER THIS SUBSECTION 
SHALL BE INCREASED BY FIVE PERCENT (5%) EVERY YEAR 
EFFECTIVE 
ON 
JANUARY 
1, 
2024, 
THROUGH 
REVENUE
REGULATIONS ISSUED BY THE SECRETARY OF FINANCE.
"Duly registered cigarettes packed by hand shall only be packed in 
twenties and other packaging combinations of not more than twenty.
"'Cigarettes packed by hand' shall refer to the manner of packaging 
of cigarette sticks using an individual person's hands and not through any 
other means such as a mechanical device, machine or equipment.
"(C) 
Cigarettes Packed b\j Machine. - There shall be levied, assessed 
and collected on cigarettes packed by machine a tax at the rates prescribed 
below:
"[Effective on January 1, 2018 until June 30, 2018, the tax on all 
cigarettes packed by machine shall be Thirty two pesos and fifty centavos 
(P32.50) per pack;
"Effective on July 1, 2018 until December 31, 2019, the tax on all 
cigarettes packed by machine shall be Thirty five pesos (P35.00) per pack;
"Effective on January 1, 2020 until December 31, 2021, the tax on all 
cigarettes packed by machine shall be Thirty seven pesos and fifty 
centavos (P37.50) per pack;


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"Effective on January 1, 2022 until December 31, 2023, the tax on all 
cigarettes packed by machine shall be Forty pesos (P40.00) per pack;
"The rates of tax imposed under this subsection shall be increased 
by four percent (4%) every year thereafter effective on Januaiy 1, 2024, 
through revenue regulations issued by the Secretary of Finance.]
"EFFECTIVE ON JANUARY 1, 2020, FORTY-FIVE PESOS 
(P45.00) PER PACK;
"EFFECTIVE ON JANUARY 1, 2021, FIFTY PESOS (P50.00) PER 
PACK;
"EFFECTIVE ON JANUARY 1, 2022, FIFTY-FIVE PESOS (P55.00) 
PER PACK;
"EFFECTIVE ON JANUARY 1, 2023, SIXTY PESOS (P60.00) PER 
PACK;
"THE RATES OF TAX IMPOSED UNDER THIS SUBSECTION 
SHALL BE INCREASED BY FIVE PERCENT (5%) EVERY YEAR 
EFFECTIVE 
ON 
JANUARY 
1, 
2024, 
THROUGH 
REVENUE
REGULATIONS ISSUED BY THE SECRETARY OF FINANCE.
"Duly registered cigarettes packed by machine shall only be packed 
in twenties and other packaging combinations of not more than twenty.
"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.
"[Cigarettes introduced in the domestic market after the effectivity 
of tliis Act shall be initially tax classified according to their suggested net 
retail prices.


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'"'Suggested net retail price' shall mean the net retail price at which 
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 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 cigarette against the net 
retail price as defined herein and initially determine the correct tax 
bracket under which a newly introduced cigarette 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 under which a newly introduced cigarette shall be 
classified.
"'Net retail price' shall mean the price at wliich the cigarette is sold 
on retail in at least five (5) major supermarkets in Metro Manila (for 
brands of cigarettes marketed nationally), excluding the amount intended 
to cover the applicable excise tax and the value-added tax. For cigarettes 
which are marketed only outside Metro Manila, the 'net retail price' shall 
mean the price at which the cigarette is sold in at least five (5) major 
supermarkets in the region excluding the amount intended to cover the 
applicable excise tax and the value-added tax.
"The net retail price shall be determined by the Bureau of Internal 
Revenue 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


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Oversight Committee on tlie Compreliensive Tax Reform Program created 
under Republic Act No. 8240.
"The proper tax classification of cigarettes, whether registered 
before or after the effectivity of this Act, shall be determined every two (2) 
years from the date of effectivity of this Act.
"All cigarettes 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 cigarettes 
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.]
"No tobacco products manufactured in the Philippines and 
produced for export shall be removed from their place of manufacture or 
exported without posting of an export bond equivalent to the amount of 
the excise tax due thereon if sold domestically: Provided, however. That 
tobacco products for export ma)' be transferred from the place of 
manufacture to a bonded facility, upon posting of a transfer bond, prior to 
export.
"Tobacco products imported into the Philippines and destined for 
foreign countries shall not be allowed entry without posting a bond 
equivalent to the amount of customs duty, excise and value-added taxes 
due thereon if sold domestically.
"Manufacturers and importers of cigars and cigarettes shall, within 
thirty (30) days from the effectivity of this Act and within the first five (5) 
days of every month thereafter, submit to the Commissioner a sworn


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Statement of the volume of sales AND REMOVALS for cigars and/or 
cigarettes [sold] 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 pennit 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 
aggregate amount of deficiency taxes, surcharges and interest which may 
be assessed pursuant to this Section.
"SELLING OF TOBACCO PRODUCTS AT A PRICE LOWER 
THAN TLIE COMBINED EXCISE AND VALUE-ADDED TAXES 
IMPOSED UNDER THE LAW SHALL BE PROHIBITED. THE SELLER 
OF SUCH PRODUCTS SHALL BE PUNISHED WITH A FINE OF NOT 
LESS THAN TEN (10) TIMES THE AMOUNT OF EXCISE PLUS 
VALUE-ADDED 
TAXES 
DUE 
BUT 
NOT 
LESS 
THAN 
TWO 
HUNDRED THOUSAND PESOS (P200,000.00) NOR MORE THAN 
FIVE 
HUNDRED 
THOUSAND 
PESOS 
(500,000.00), 
AND 
IMPRISONMENT OF NOT LESS THAN FOUR (4) YEARS BUT NOT 
MORE THAN SIX (6) YEARS.
THE BUREAU OF INTERNAL REVENUE IS MANDATED TO 
ISSUE A REVENUE REGULATION PRESCRIBING THE CIGARETTE 
FLOOR PRICE OR THE MINIMUM CIGARETTE PRICE TAKING 
INTO ACCOUNT THE SUM OF THE EXCISE AND VALUE-ADDED 
TAXES AS PROVIDED HEREIN.


'Any person liable for any of the acts or omissions prohibited
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under this Section shall be criminally liable and penalized under Section 
254 of this Cocie. Any person who willfully aids or abets in the 
commission of any such act or omission shall be criminally liable in the 
same manner as the principal.
"If the offender is not a citizen of the Philippines, he shall be 
deported immediately after serving the sentence, without further 
proceedings for deportation."
SEC. 2. Sec. 164 of the National Internal Revenue Code of 1997, as amended, is
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hereby amended to read as follows:
"SEC. 164. Infonnntioii to be Given bij Manufacturers, Importers, 
Jndentors and Wholesalers of any Apparatus or Mechanical Contrivance 
Specially for the Manufacture of Articles Subject to Excise Tax and 
Importers, Indentors, Manufacturers or Sellers of Cigarette Papers in 
Bobbins, 
Cigarette 
Tipping 
Paper 
or 
Cigarette 
Filter 
Tips. 
- 
Manufacturers, indentors, wholesalers and importers of any apparatus or 
mechanical contrivance specially for the manufacture of articles subject to 
tax shall, before any such apparatus or mechanical contrivance is removed 
from the place of manufacture or from the customs house, give written 
information to the Commissioner as to the nature and capacity of the 
same, the time when it is to be removed, and the place for which it is 
destined, as well as the name of the person by whom it is to be used; and 
such apparatus or mechanical contrivance shall not be set up nor 
dismantled or transferred without a permit in writing from the 
Commissioner.
"A written permit from the Commissioner for importing, 
manufacturing or selling of cigarette paper in bobbins or rolls, cigarette
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tipping paper or cigarette filter tips is required before any person shall
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engage in the importation, manufacture or sale of the said articles. No 
permit to sell said articles shall be granted unless the name and address of 
the prospective buyer is first submitted to the Commissioner and 
approved by him. Records, showing the stock of the said articles and the 
disposal thereof by sale of persons with their respective addresses as 
approved by the Commissioner, shall be kept by the seller, and records, 
showing stock of said articles and consumption thereof, shall be kept by 
the buyer, subject to inspection bv internal revenue officers.
"ANY VIOLATION OF THIS SECTION SHALL BE NON- 
BAILABLE, INCLUDING MERE POSSESSION OF ANY APPARATUS 
OR MECHANICAL CONTRIVANCE FOR THE MANUFACTURE OF 
CIGARETTES, CIGARETTE PAPER, OR CIGARETTE TIPPING 
PAPER, FOR WHICH NO PERMIT WAS OBTAINED FROM THE 
COMMISSIONER SHALL BE PUNISHED WITH A FINE OF NOT 
LESS THAN ONE HUNDRED MILLION PESOS (PI00,000,000.00) AND 
IMPRISONMENT OF NOT LESS THAN FOURTEEN (14) YEARS."
SEC. 3. Sec. 260 of the National Internal Revenue Code of 1997, as amended, is
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hereby am en d ed  to read as follows:
"SEC. 260. Unla^vfiil Possession of Cigarette Paper in Bobbins or 
Rolls, Etc. - It shall be unlawful for any person to have in his possession 
cigarette paper in bobbins or rolls, cigarette tipping paper or cigarette 
filter tips, without the corresponding authority therefor issued by tire 
Commissioner. 
Any person, importer, manufacturer of cigar and 
cigarette.s, who has been found guilty under this Section, shall, upon 
conviction for each act or omission, be punished by a fine of not less than 
than [1’wenty thousand pesos (P20,000) but not more than One hundred
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1 
thousand 
pesos 
(P100/000)] ONE 
MILLION 
FIVE 
HUNDRED
2 
THOUSAND 
PESOS 
(PI,500,000.00) 
BUT 
NOT 
MORE 
THAN
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FIFTEEN MILLION PESOS (P15,000,000.00) and [suffer] imprisonment
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for a term of not less than six (6) years and one (1) day but not more than
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twelve (12) years."
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SEC. 4. Sec. 262 of the National Internal Revenue Code of 1997, as amended, is
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hereby amended to read as follows:
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“"SEC. 262. Shipfiietit or Removal of Liquor or Tobacco Products
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Under False Name or Brand or as an Imitation of an\j Existing or
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Othenvise Known Product Name or Brand. - Any person who ships,
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transports or removes spirituous, compounded or fermented liquors,
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wines or any manufactured products of tobacco under any other than
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the proper name or brand known to the trade as designating the kind and
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quality of the contents of the cask, bottle or package containing the same
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or as an imitation of any existing or otherwise known product name or
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brand or causes such act to be done, shall, upon conviction for each act or
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omission, be punished by a fine of not less than [Twenty Thousand
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Pesos (P20,000) but not more than One Hundred thousand pesos
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(P100,000)] ONE MILLION FIVE HUNDRED THOUSAND PESOS
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(Pl,500,000.00) BUT NOT MORE THAN FIFTEEN MILLION PESOS
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(P15,000,000.00) and [suffer] imprisonment of not less than six (6) years
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and one (1) day but not more than twelve (12) years."
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SEC. 5. Sec. 263 of the National Internal Revenue Code of 1997, as amended, is
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hereby amended to read as follows:
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"SEC. 263. Unlajvful Possession or Removal of Articles Sidfect to
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Excise Tax Without Pai/ment of the Ta.x. - Any person who owns and/or
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is found in possession of imported articles subject to excise tax, the tax on
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which has not been paid in accordance with law, or any person who owns 
and/or is found in possession of imported tax-exempt articles other than 
those to whom they are legally issued shall be punished by:
"(a) A fine of not less than [One thousand pesos (Fl,000)] ONE 
HUNDRED THOUSAND (P100,000.00) [nor] BUT NOT more than [Two 
thousand pesos (P2,000)] TWO HUNDRED THOUSAND PESOS 
(P200,000.00) and [suffer] imprisonment of not less than sixty (60) days 
but not more than one hundred (100) days if the appraised value, to be 
determined in the manner prescribed in the [Tariff and Customs Code] 
CUSTOMS MODERNIZATION AND TARIFF ACT (REPUBLIC ACT 
NO. 10863), including duties and taxes, of the articles does not exceed 
[One thousand pesos (P1,000)] TWO HUNDRED FIFTY THOUSAND 
PESOS (P250,000.00);
"(b) A fine of not less than [Ten thousand pesos (P10,000)] ONE 
MILLION PESOS (Pl,000/000.00) but not more than [Twenty thousand 
pesos (P20,000)] TWO MILLION PESOS (P2,000,000.00) and 
[suffer] 
imprisonment of not less than two (2) years but not more than four (4) 
years if the appraised value, to be determined in the manner prescribed in 
the [Tariff and Customs Code] CUSTOMS MODERNIZATION AND 
TARIFF ACT (REPUBLIC ACT NO. 10863), including duties and taxes, of 
the articles exceeds [One thousand pesos (P1,000)] TWO HUNDRED 
FIFTY THOUSAND PESOS (P250,000.00) but does not exceed [Fifty 
thousand pesos 
(P50,000)] FIVE HUNDRED THOUSAND PESOS 
(P500,000.00);
"(c) A fine of not less than [Thirty thousand pesos (P30,000)] 
THREE MILLION PESOS (P3,000,000.00) but not more than [Sixty 
thousand pesos (P60,000)] FOUR MILLION PESOS (P4,000,000.00) and
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[suffer] imprisonment of not less than four (4) years but not more than six 
(6) years, 
if 
the appraised value, to be determined in the manner 
prescribed 
in 
the 
[Tariff 
and 
Customs 
Code] 
CUSTOMS 
MODERNIZATION AND TARIFF ACT (REPUBLIC ACT NO. 10863), 
including duties and taxes of the articles is more than [Fifty thousand 
pesos (P50,000) but does not exceed One hundred fifty thousand pesos 
(PI50,000)] FIVE HUNDRED THOUSAND PESOS (P500,000.00) BUT 
DOES NOT EXCEED ONE MILLION PESOS (P1,000,000.00); [or]
"(d) A fine of not less than [Fifty thousand pesos (P50,000)] TEN 
MILLION PESOS (P10,000,000.00) but not more than [One hundred 
thousand 
pesos 
(P100,000)] 
TWENTY 
MILLION 
PESOS 
(P20,000,000.00) 
and 
[suffer] imprisonment of not less than ten (10) 
years but not more than twelve (12) years, if the appraised value, to be 
determined in the manner prescribed in the [Tariff and Customs Code] 
CUSTOMS MODERNIZATION AND TARIFF ACT (REPUBLIC ACT 
NO. 10863), including duties and taxes, of the articles [exceeds One 
hundred fifty thousand pesos (P150,000)] 
IS MORE THAN ONE 
MILLION PESOS (P1,000,000.00) BUT NOT MORE THAN FIVE 
MILLION PESOS (P5,000,000.00)[.];
"Any person who is found in possession of locally manufactured 
articles subject to excise tax, the tax on which has not been paid in 
accordance with law, or any person who is found in possession of such 
articles which are exempt from excise tax other than those to whom the 
same is lawfully issued shall be punished with a fine of not less than (10) 
times the amount of excise tax due on the articles found but not less 
than 
[Five 
hundred 
pesos (P500)] ONE MILLION PESOS 
(PI,000,000.00) and [suffer] imprisonment of not less than [two (2) years
13


2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
1
but not more than four (4) years] FIVE (5) YEARS BUT NOT MORE 
THAN EIGHT (8) YEARS.
"Any manufacturer, IMPORTER, owner or person in charge of any 
article subject to excise tax who removes or allows or causes the unlawful 
removal of any such articles from the place of production or bonded 
warehouse, upon which the excise tax has not been paid at the time and in 
the manner required, and any person who knowingly aids or abets in the 
removal of such articles as aforesaid, or conceals the same after illegal 
removal shall, for the first offense, be punished with a fine of not less than 
ten (10) times the amount of excise tax due on the articles but not less 
than 
[One thousand pesos (P1,000)] 
FIFTY MILLION PESOS 
(P50,000,000.00) and [suffer] imprisonment of not less than [one (1) year 
but not more than two (2) years] FIVE (5) YEARS BUT NOT MORE 
THAN EIGHT (8) YEARS.
"The mere unexplained possession of articles subject to excise tax, 
tlie tax on which has not been paid in accordance with law, shall be 
punishable under this Section."
SEC. 6. Section 265 of the NIRC, as amended by RA 10963 is hereby further
19 
amended, to I'ead as follows:
20 
"SEC. 265. Offenses Relating to Stamps. 
- 
Any person who
21 
commits 
any 
of 
the 
acts 
enumerated hereunder shall, upon
22 
conviction thereof, be punished by a fine of not less than [Twenty
23 
thousand 
pesos (P20,000) but not more than Fifty thousand pesos
24 
(P50,000)] 
TEN MILLION PESOS (P10,000,000) BUT NOT MORE
25 
THAN FIVE HUNDRED MILLION PESOS (P500,000,000) and [suffer]
26
27
imprisonment of not less than [four (4)] FIVE (5) years but not more than 
eight (8) years:
14


1 
"(a) Making, importing, selling, using or possessing without
2 
express authority from the Commissioner, any die for printing or making
3 
stamps, labels, tags or playing cards;
4 
"(b) RE-USING PREVIOUSLY AFFIXED STAMPS, [E]Erasing
5 
the cancellation marks of any stamp previously used, or altering the
6 
written figures or letters or cancellation marks on 
internal revenue
7 
stamps;
8 
"(c) Possessing false, counterfeit, restored or altered stamps, labels
9 
or tags or causing the commission of any such offense by another;
10 
"(d) Selling or offering for sale any box or package containing
11 
articles 
subject 
to 
excise 
tax 
with 
false, spurious or counterfeit
12 
stamps or labels or selling from any such fraudulent box, package or
13 
container as aforementioned; or
14 
"(e) Giving away or accepting from another, or selling, buying
15 
or using containers on which the stamps are not completely destroyed.
16 
"PROVIDED, THAT THE CUMULATIVE POSSESSION OF
17 
FALS^COUNTERFEIT/RECYCLED TAX STAM PS IN EXCESS OF
18 
THE AMOUNT OF FIFTY MILLION PESOS (P50,000,000.00) BE
19 
PUNISHED BY A FINE OF FIVE HUNDRED MILLION PESOS
20 
(P500,000,000.00) OR UP TO FIVE TIMES THE VALUE OF THE
21 
ILLEGAL STAMPS SEIZED AND A MINIMUM OF TEN (10) YEARS
22 
IMPRISONMENT."
23 
SEC. 7. Section 288(C) of the NIRC, as amended by RA 10963 is hereby further
24 
amended, to read as follows:
25 
"SEC. 288. Disposition ofliicrcincntal Rcvciiiu’s. -
26 
"(A) 
-V -r .V
27 
"(B) 
X 
X 
X
IS


'(C) 
Iiicrenicntnl Revenues from the Excise Tax on Alcohol ami Tobacco
2 
Products. -
3 
"After deducting the allocations under Republic Act Nos. 7171 and
4 
8240, eighty percent (80%) of the remaining balance of the incremental
5 
revenue derived from this Act shall be allocated for the [universal health
6 
care under the National Health Insurance Program, the attainment of the
7 
millennium 
development goals and health awareness programs]
8 
IMPLEMENTATION OF REPUBLIC ACT NO. 11223, OTHERWISE
9 
KNOWN AS THE UNIVERSAL HEALTH CARE ACT OF 2019; and
10 
twenty percent (20%) shall be allocated nationwide, based on political and
11 
district subdivisions, for medical assistance, [and health enhancement
12 
facilities program] THE FIEALTH FACILITIES ENHANCEMENT
13 
PROGRAM (HFEP), AND PROGRAMS ON HUMAN RESOURCE
14 
DEVELOPMENT, 
TRAINING 
AND 
SALARY 
INCREASES 
OF
15 
HEALTH PERSONNEL, the annual requirements of which shall be
16 
d eterm in ed  by the D epartm ent of H ealth (DOIT).
17 
"x X X
18 
"Notwithstanding any provisions herein to the contrary, the
19 
incremental revenues from the tobacco taxes under this Act shall be
20 
subject to Section 3 of Republic Act No. 7171, otherwise known as "An Act
21 
to Promote the Development of the Farmer in the Virginia Tobacco
22 
Producing Provinces", and Section 8 of Republic Act No. 8240, otherwise
23 
known as "An Act Amending Sections 138, 140, & 142 of the National
24 
Internal R evenue C ode, As A m ended, and for other Purposes".
25 
"x X x"
26 
SEC. 8. Iinpleniettiing Rules and Regulations. - Within thirty (30) days from  the
27 
effectivity of this Act, the Secretary of Finance shall, upon the recommendation of the
16


1 
Commissioner of Internal Revenue, promulgate the necessary rules and regulations for
2 
its effective implementation.
3 
SEC. 9. Separability Clause. — If any provision of this Act is subsequently
4 
declared invalid or unconstitutional, the other provisions hereof which are not affected
5 
thereby shall remain in full force and effect.
6 
SEC. 10. Repealing Clause. — All laws, decrees, ordinances, rules and
7 
regulations, executive or administrative orders, and such other presidential issuances
8 
that are inconsistent with any of the provisions of this Act are hereby repealed,
9 
amended or otherwise modified accordingly.
10 
SEC. 11. Effectwitij. - This Act shall take effect on January 1, 2020 following its
11 
complete publication in the Official Gazette or in at least one (1) newspaper of general
12 
circulation.
13 
Approx’ed,
17