Briefing on RA 10963: Tax

Reform for Acceleration and

Inclusion (TRAIN) – Excise Taxes
 Tobacco
RA 10351/ TRAIN
RR 17-2012
CIGARETTES, 2017 January 1, July 1, 2018 January 1, January 1, January
per pack 2018 until until 2020 until 2022 until 1, 2024
June 30, December December December Onwards
2018 31, 2019 31, 2021 31, 2021
Cigarettes P 30.00 P 32.50 P 35.00 P 37.50 P40.00 Effectivity
1/1/2024,
packed by the
hand specific
P 35.00 P 37.50 P40.00 tax rate
Cigarettes P 30.00 P 32.50 shall be
packed by increased
machine by 4%
every year
thereafter

TRAIN Briefing – Excise Taxes

VER 1.0 – January 2018
Petroleum
PRODUCTS RA TRAIN
10351/
RR 17- January January January
2012 1, 2018 1, 2019 1, 2020
(a) Lubricating oils and greases, including but not P 4.50
limited to basestock for lube oils and greases,
high vacuum distillates, aromatic extracts and
other similar preparations, and additives for
lubricating oils and greases, whether such
additives are petroleum based or not, per liter
and kilogram respectively, of volume capacity P 8.00 P 9.00 P 10.00
or weight.
(a.1) Locally produced or imported oils previously P 4.50
taxed but are subsequently reprocessed,
refined or recycled, per liter and kilogram of
volume capacity or weight.
TRAIN Briefing – Excise Taxes
VER 1.0 – January 2018
Petroleum
PRODUCTS RA TRAIN
10351/
RR 17- January January January
2012 1, 2018 1, 2019 1, 2020
(b) Processed gas, per liter of volume P 0.05
capacity.
(c) Waxes and petrolatum per kilogram. P 3.50
(d) Denatured alcohol to be used for P 0.05 P 8.00 P 9.00 P 10.00
motive power, per liter of volume
capacity.
(e) Asphalts, per kilogram. P 0.56
(f) Naphtha, regular gasoline, and other P 4.35
similar products of distillation, per liter of P 7.00 P 9.00 P 10.00
volume capacity
TRAIN Briefing – Excise Taxes
VER 1.0 – January 2018
Petroleum
PRODUCTS RA TRAIN
10351/
RR 17- January January January
2012 1, 2018 1, 2019 1, 2020
-
Pyrolysis gasoline
P 7.00 P 9.00 P 10.00
(g) Unleaded premium gasoline, per liter of P 4.35
volume capacity
(h) Kerosene, per liter of volume capacity P 0.00 P 3.00 P 4.00 P 5.00
(i) Aviation turbo jet fuel, per liter of volume P 3.67
capacity
Aviation gas - P 4.00 P 4.00 P 4.00
(j) Kerosene, when used as aviation fuel, per P 3.67
liter of volume capacity
TRAIN Briefing – Excise Taxes
VER 1.0 – January 2018
Petroleum
PRODUCTS RA TRAIN
10351/
RR 17- January January January
2012 1, 2018 1, 2019 1, 2020
(k) Diesel fuel oil, and on similar fuel oils P 0.00
having more or less the same generating
power, per liter of volume capacity
(l) Liquefied petroleum gas used for motive P 0.00
power, per kilogram P 2.50 P 4.50 P 6.00
(m) Bunker fuel oil, and on similar oils having P 0.00
more or less the same generating power,
per liter of volume capacity
(n) Petroleum coke, per metric ton -
(o) Liquefied petroleum gas, per kilogram P 0.00 P 1.00 P 2.00 P 3.00

TRAIN Briefing – Excise Taxes

VER 1.0 – January 2018
Petroleum
PRODUCTS RA TRAIN
10351/
RR 17- January January January
2012 1, 2018 1, 2019 1, 2020
(p) Naphtha and pyrolysis gasoline, when used as a raw P 0.00
material in the production of petrochemical products
or in the refining of petroleum products, or as
replacement fuel for natural-gas-fired-combined
cycle power plant, in lieu of locally-extracted natural
gas during the non-availability thereof, per liter of
volume capacity P 0.00 P 0.00 P 0.00
(q) Liquefied petroleum gas, when used as raw material P 0.00
in the production of petrochemical products, per
kilogram
(r) Petroleum coke, when used as feedstock to any -
power generating facility, per metric ton

TRAIN Briefing – Excise Taxes

VER 1.0 – January 2018
 8 Exception to Revised Excise Tax Rates
The revised rates under Section 2 shall not apply under the
following instances:
a) Lubricating oils and greases produced from basestocks and
additives on which the excise tax has already been paid
Petroleum shall no longer be subject to excise tax.
b) Unless otherwise provided by special laws, if the denatured
alcohol is mixed with gasoline, the excise tax on which has
already been paid, only the alcohol content shall be subject
to the tax herein prescribed. The removal of denatured
alcohol of not less than one hundred eighty degrees (180°)
proof (ninety percent (90%) absolute alcohol) shall be
deemed to have been removed for motive power, unless
shown otherwise;

TRAIN Briefing – Excise Taxes

VER 1.0 – January 2018
 9 Creditable Excise Tax
Petroleum
TRAIN Briefing – Excise Taxes
VER 1.0 – January 2018
The excise tax paid on the purchased base
stock (bunker) used in the manufacture of
excisable articles and forming part thereof shall
be credited against the excise tax due thereon.
For purposes of these regulations, any excess
of excise taxes paid on raw materials resulting
from manufacturing, blending, processing,
storage and handling losses shall not give rise
to a tax refund or credit.
 10 Suspension of Scheduled Increase
For the period covering 2018 to 2020, the
scheduled increase in the excise tax on fuel as
imposed in this section shall be suspended when
Petroleum
the average Dubai crude oil based on Mean Of
Platts Singapore (MOPS) for three (3) months
prior to the scheduled increase of the month
reaches or exceeds eighty dollars (USD 80) per
barrel. A separate Revenue Regulation (RR)
shall be issued for this purpose.
TRAIN Briefing – Excise Taxes
VER 1.0 – January 2018
 11 Mandatory Marking of all Petroleum
Products
The use of an official fuel marking or similar technology
on petroleum products that are refined, manufactured, or
imported into the Philippines, and that are subject to the
Petroleum payment of taxes and duties, such as but not limited to
unleaded premium gasoline, kerosene, and diesel fuel
oil shall be required. It shall be implemented in
accordance with rules and regulations to be issued by
the Secretary of Finance in consultation with the
Commissioner of Internal Revenue and Commissioner of
Customs and in coordination with the Secretary of
Energy.
TRAIN Briefing – Excise Taxes
VER 1.0 – January 2018
 12
Transitory Provision
a) Submission of Stock Inventories. Concerned oil
companies, owners, operators or lessees of
storage depots shall submit duly notarized
inventories of all petroleum products as of
Petroleum midnight of December 31, 2017 to Excise LT Field
Operations Division (ELTFOD)

b) Accounting for stocks or inventory of goods after

TRAIN Briefing – Excise Taxes
VER 1.0 – January 2018
each date of effectivity of the new excise tax rates.
These inventories of petroleum products taken
prior to each date of effectivity shall be liquidated
and accounted for on a “First-In First-Out” (FIFO)
method of inventory.
 13
Transitory Provision

c) Issuance of Withdrawal Certificates. All

Withdrawal Certificates issued covering the
removals of petroleum products subject to the old
Petroleum or previous tax rates products shall be prominently
stamped with the phrase “STOCKS ON HAND
PRIOR TO APPLICABLE DATE OF
EFFECTIVITY”.

TRAIN Briefing – Excise Taxes

VER 1.0 – January 2018
Minerals

PRODUCT TYPE RA TRAIN

10351/
RR 17- January January January
2012 1, 2018 1, 2019 1, 2020
On coal and coke, per metric ton P 10.00 P 50.00 P 100.00 P 150.00

TRAIN Briefing – Excise Taxes

VER 1.0 – January 2018
Minerals

PRODUCT TYPE RA 10351/ TRAIN

RR 17-
2012

On all non-metallic mineral and quarry resources

1. Locally extracted or produced, based on actual
2% 4%
market value
2. In the case of importation based on value used
by Bureau of Customs in determining tariff and 2% 4%
customs duties, net of excise tax and VAT
3. Locally-extracted natural gas and liquefied natural
P0.00 Exempt
gas

TRAIN Briefing – Excise Taxes

VER 1.0 – January 2018
 Minerals

PRODUCT TYPE RA 10351/ TRAIN

RR 17-
2012

On all non-metallic mineral and quarry resources

1. Locally extracted or produced, based on actual
market value
a) Copper and other metallic minerals 2% 4%
b) Gold and chromite 2% 4%

TRAIN Briefing – Excise Taxes

VER 1.0 – January 2018
Minerals
PRODUCT TYPE RA 10351/ TRAIN
RR 17-
2012

On all non-metallic mineral and quarry resources

2. In the case of importation based on value used
by Bureau of Customs in determining tariff and
customs duties, net of excise tax and VAT
a) Copper and other metallic minerals 2% 4%
b) Gold and chromite 2% 4%
On indigenous petroleum, based on the fair
international market price thereof, on the first taxable 3% 6%
sale, barter, exchange or similar transaction.
TRAIN Briefing – Excise Taxes
VER 1.0 – January 2018
 Automobiles
Based on the Net Manufacturer’s Price/Importer’s Selling Price

RR 25-2003 TRAIN
P 12,000 + 20%
Over P600,000 up to P0 up to P600,000 4%
P 1,100,000
in excess of
P 600,000
Over P600,000
P112,000+ 40% 10%
Over P 1,100,000
in excess of up to P1,000,000
Up to P2,100,000
P1,100,000 Over P1,000,000
20%
P512,000 + 60% up to P4,000,000
Over P2,100,000 in excess of
P2,100,000 Over P4,000,000 50%

TRAIN Briefing – Excise Taxes

VER 1.0 – January 2018
 19
Hybrid Electric Vehicle – refer to a motor
vehicle powered by electric energy, with or
without provision for off-vehicle charging, in
combination with gasoline, diesel or any
Automobiles
other motive power: provided, that, for
purposes of this Act, a Hybrid Electric
Vehicle must be able to propel itself from a
stationary condition using solely electric
motor

TRAIN Briefing – Excise Taxes

VER 1.0 – January 2018
 20
Provided, that Hybrid Vehicles shall be
taxed at fifty percent (50%) of the
applicable excise tax rates on automobiles
subject to the conditions in Section 9(E) of
Automobiles
this regulation: Provided, further, that in the
case of imported automobiles not for sale,
the tax imposed herein shall be based on
the total landed value, including transaction
value, customs duty and all other charges.

TRAIN Briefing – Excise Taxes

VER 1.0 – January 2018
 21
Tax-Exempt Removals of Automobiles
E. Purely electric vehicles shall be exempt from the
excise tax on automobiles. Hybrid vehicles shall be
subject to fifty percent (50%) of the applicable excise
tax rates on automobiles. Prior to the removal of the
automobiles from the manufacturing plant or customs
Automobiles custody, the department of energy (DOE) shall
determine whether the automobiles are hybrid vehicles
or purely electric vehicles, and furnish the
Commissioner of Internal Revenue, Attention: Chief,
Excise Large Taxpayers Regulatory Division (ELTRD),
certified copies of the results of such examination or
indorsement to that effect.
F. Pick-ups
TRAIN Briefing – Excise Taxes
VER 1.0 – January 2018
 22
Automobiles
TRAIN Briefing – Excise Taxes
VER 1.0 – January 2018
Validation of Manufacturer’s and Importer’s
Selling Price
By the end of three months from the imposition of the new
rates, the Bureau of Internal Revenue shall validate the
Manufacturer’s or Importer’s Selling Price of the newly
introduced models against the Manufacturer’s or Importer’s
Selling Price as defined herein and initially determine the
correct bracket under which a newly introduced model shall be
classified. After the end of one year from such validation, and
every year thereafter, the Bureau of Internal Revenue shall
revalidate the initially validated Net Manufacturer’s or
Importer’s Selling Price against the Net Manufacturer’s or
Importer’s Selling Price as of the time of revalidation in order to
finally determine the correct tax bracket under which a newly
introduced model shall be classified.
 23
1. All manufacturer’s/assembler’s or importers are hereby
required to file an updated manufacturer’s/assemblers
or importer’s sworn statement for each brands/models
of automobiles as of the day immediately before the
Transitory date of effectivity of these Regulations.
Provisions 2. All manufacturers/assemblers or importers shall submit
a duly notarized list of inventory on-hand that are
located within the manufacturing/assembly plant,
storage facility or warehouse or the customs’ premises
for which import entries have been filed as of the day
immediately before the date of effectivity of these
Regulations, indicating therein the brand, year model,
engine, body and chassis numbers thereof,
TRAIN Briefing – Excise Taxes
VER 1.0 – January 2018