Sin Tax Law

“Reactions of Freshmen Students of Technological Institute of the Philippines

through Sin Tax Law, particularly in Electrical

Engineering Department”

An Act Reconstructing the excise tax on alcohol and tobacco products by amending sections 141, 142, 143, 144, 145, 8, 131 and

288 of Republic Act. No. 8424. Otherwise known as the “National Internal Revenue

Code of 1997, as amended by Republic Act No. 9334, and for other purposes.

Republic Act. No. 10351 or the “Sin Tax Law”

• A state-sponsored tax that is added to products or services that are seen as vices, such as alcohol, tobacco and gambling.

• These are typically added to liquor, cigarettes and other non-luxury items. These taxes also provide a source of government revenue.

Definition of Sin Tax Law (RA. 103511)

This Law had been passed and signed because the Government would like to have the reconstruction of the excise tax on alcohol and tobacco products by amending Sections 141, 142, 143, 144, 145, 8, 131, and 288 of Republic Act No. 8424. Otherwise known as the “National Internal Revenue Code of 1997”, as amended by Republic Act No. 9334, and for other purposes.

Summary of the Act

• An ad valorem tax equivalent to 15% of the net retail price (excluding the excise tax and the value-added tax) per proof; and

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

Tax Added to the Distilled Spirits Section 141 of RA. 8424(Effective on January 1, 2013)

• An ad valorem tax equivalent to 20% of the net retail price (excluding the excise tax and the value-added tax) per proof; and

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

• In addition to the ad valorem tax herein imposed, the specific tax rate of (P20.00) imposed under this Section shall be increased by 4% every year thereafter effective on January 1, 2016, through revenue regulations issued by the Secretary of Finance

Tax Added to the Distilled Spirits, Section 141 of RA. 8424(Effective on January 1, 2015)

• Sparkling wines/champagne regardless of proof, if the net retail price per bottle of (750 mL) volume capacity (excluding the excise tax and value-added tax) is;

• Five Hundred pesos (P500.00) or less Two Hundred pesos (P200.00); and

• More than Five Hundred pesos (P500.00) – Seven Hundred pesos (P700.00)

Tax Added to the Wines (Sparkling Wines/Champagne), Section 142 of RA. 8424

• Still wines and carbonated wines containing 14% of alcohol by volume or less, P30.00

• Still wines and carbonated wines containing more than 14% but not more than 25% of alcohol by volume, P60.00

Tax Added to the Wines (Still Wines and Carbonated Wines), Section 142 of RA. 8424

• Fortified wines containing more than 25% of alcohol by volume shall be taxed as distilled spirits. ‘Fortified wines’ shall mean natural wines to which distilled spirits are added to increase their alcohol strengh.

• The rates of tax imposed under this Sections shall be increased by 4% every year thereafter effective on January 1, 2014, through revenue regulations issued by the Secretary of Finance

Tax Added to the Wines (Fortified Wines), Section 142 of RA. 8424

• Fermented Liquors – there shall be levied, assessed and collected an excise tax on beer, lager beer, ale, porter and other fermented liquors except tuba, basi, tapuy and similar fermented liquors in accordance with the following schedule.

Tax Added to the Fermented Liquors, Section 143 of RA. 8424

• If the net retail price (excluding the excise tax and the value-added tax) per liter of volume capacity is P50.60 or less, the tax shall be P15.00 per liter; and

• If the net retail price (excluding the excise tax and the value-added tax) per liter of volume capacity is more than P50.60 or less, the tax shall be P20.00 per liter; and

Tax Added to the Fermented Liquors, Section 143 of RA. 8424(Effective on January 1, 2013)

• The rates of tax imposed under this Section shall be increased by 4% every year thereafter effective on January 1, 2018, through revenue regulations issued by the Secretary of Finance. However, in case of fermented liquors affected by the ‘no downward reclassification’ provision prescribed under this Section, the 4% increased shall apply to their respective applicable tax rates.

Tax Added to the Fermented Liquors, Section 143 of RA. 8424

• Tobacco Products – There shall be collected an excise tax of P1.75 effective January 1, 2013 on each kilogram of the Tobacco Products

• The rates of tax imposed under this Section shall be increased by 4% every year thereafter effective on January 1, 2014, through revenue regulations issued by the Secretary of Finance.

Tax Added to the Tobacco, Section 144 of RA. 8424

• Cigars – There shall be levied, assessed and collected on cigars an excise tax accordance with the following schedule:

• Effective on January 1, 2013 – an ad valorem tax equivalent to 20% of the net retail price (excluding the excise tax and the value-added tax) per cigar; and

• In addition to the ad valorem tax herein imposed, a specific tax of P5.00 per cigar

Tax Added to the Cigars and Cigarettes, Section 145 of RA. 8424

• In addition to the ad valorem tax herein, a specific tax rate of P5.00 imposed under this subsection shall be increased by 4% effective on January 1, 2014 through revenue regulations issued by the Secretary of Finance


• 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, 2013, P12.00 per pack• Effective on January 1, 2014, P15.00 per pack• Effective on January 1, 2015, P18.00 per pack• Effective on January 1, 2016, P20.00 per pack• Effective on January 1, 2017, P30.00 per pack


• The rates of tax imposed under this subsection shall be increased by 4% every year effective on January 1, 2018, through revenue regulations issued by the Secretary of Finance


• Cigarettes Packed by Machine – there shall be levied, assessed and collected on cigarettes packed by machines a tax at the rates prescribed below:

• Effective on January 1, 2013 – If the net retail price (excluding the excise tax and the value-added tax) is P11.50 and below per pack, the tax shall be P12.00 per pack; and

• If the net retail price (excluding the excise tax and the value-added tax) is more than P11.50 per pack, the tax shall be P25.00


• Effective on January 1, 2014 – If the net retail price (excluding the excise tax and the value-added tax) is P11.50 and below per pack, the tax shall be P17.00 per pack; and

• If the net retail price (excluding the excise tax and the value-added tax) is more than P11.50, the tax shall be P27.00 per pack.

• The rates of tax imposed under this subsection shall be increased by 4% every year thereafter effective on January 1, 2018, through revenue regulations issued by the Secretary of Finance.

Thank You For Listening

Documents

Sin Tax Law