RMO No. 02-2006 — Amends RMO No. 7-2005 by renaming, creating and dropping certain Alphanumeric Tax Codes and revising the rates and bases of Excise Tax on tobacco and alcohol products Digest | Full Text

REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE BUREAU OF INTERNAL REVENUE Quezon City January 16, 2006 REVENUE MEMORANDUM ORDER NO. 2-2006 SUBJECT : Amending RMO No 7 � 2005 - Renaming of Alphanumeric Tax Codes (ATCs) and Revised Rates and Bases of Excise Tax on Tobacco and Alcohol Products TO : All Internal Revenue Officers and Others Concerned __________________________________________________________________ I. Objective : To amend certain portions contained in RMO No. 7 � 2005 such as the creation of new Alphanumeric Tax Codes (ATCs), dropping of existing ATCs and correction of tax rate. II. List of ATCs together with their corresponding new excise tax rates under the new Republic Act No. 9334 effective January 1, 2005 Alpha- PRODUCTS NEW TAX numeric RATES Tax Code (ATC) Per proof liter P 11.65 A. Alcohol Products P 11.65 (1) Distilled Spirits XA010 (a) If produced from the sap of nipa, coconut, cassava, camote, or buri palm or from the juice, syrup or sugar of the cane; XA010 If produced in a pot still by small distillers (up to 100 liters/day and 50% alcohol by volume) (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 (excluding the excise and value- added taxes) per bottle of seven hundred fifty milliliter (750 ml.) volume capacity, as follows: XA031 (1) Less than Two Hundred and Fifty Pesos (<P250.00) P 126.00 XA032 (2) Two Hundred and Fifty Pesos (P250.00) up to Six P 252.00 XA033 Hundred and Seventy Five Pesos (P675.00) P 504.00 (3) More than Six Hundred and Seventy Five Pesos (>P675.00)

Alpha- PRODUCTS NEW TAX numeric RATES Tax Code (ATC) (c) Medicinal preparations, flavoring extracts, and all other (depends on the preparations, except toilet preparations, of which, excluding chief ingredient) XA040 water, distilled spirits form the chief ingredient, shall be subject to the same tax as such chief ingredient XA061 (2) Wines Per liter (a) Sparkling wines / champagnes P 145.60 The tax shall be in accordance with the net retail price P 436.80 (excluding the excise and value-added taxes) per bottle, P 17.47 regardless of proof, as follows: P 34.94 (1) Five Hundred Pesos (P500.00) or less Per liter XA062 (2) More than Five Hundred Pesos (>P500.00) P 8.27 P 12.30 XA070 (b) Still wines containing fourteen percent (14%) of alcohol by P 16.33 XA080 volume or less XA090 (c) Still wines containing more than fourteen percent (14%) of alcohol by volume but not more than twenty-five percent (25%) of alcohol by volume Fortified wines containing more than twenty-five percent (25%) of alcohol by volume shall be taxed as distilled spirits (3) Fermented liquors XA051 The tax shall be in accordance with the net retail price (excluding XA052 excise and value-added taxes) per liter of volume capacity, as follows: XA053 (1) Less than Fourteen Pesos and Fifty Centavos (<P14.50) (2) Fourteen Pesos and Fifty Centavos (P14.50) up to Twenty- two Pesos (P22.00) (3) More than Twenty-two Pesos (>P22.00) Regardless of the net retail price, fermented liquors brewed and sold at micro-breweries or small establishments such as pubs and restaurants shall be taxed at P16.33 per liter. Note: The rates of tax imposed under Alcohol Products namely: (1) Distilled Spirits, (2) Wines and (3) Fermented Liquors shall be increased by eight percent (8%) every two years starting on January 1, 2007 until January 1, 2011.

Alpha- PRODUCTS NEW TAX numeric RATES Tax Code (ATC) P 1.00 per k.g. B. Tobacco Products P 1.00 XT010 (1) Tobacco Products per k.g. (a) Tobacco twisted by hand or reduced into a condition to be P 1.00 consumed in any manner other than the ordinary mode of per k.g. drying and curing; XT010 (b) Tobacco prepared or partially prepared with or without the use of any machine or instrument or without being pressed or sweetened; and XT010 (c) Fine-cut shorts and refuse, scraps, clippings, cuttings, stems and sweepings of tobacco. XT020 (2) Tobacco specially prepared for chewing so as to be unsuitable for P 0.79 use in any other manner. per k.g. Note: The rates of tax imposed under Tobacco Products namely: (1) Tobacco Products and (2) Tobacco prepared for chewing shall be increased by six percent (6%) every two years starting on January 1, 2007 until January 1, 2011. (3) Cigars The tax shall be in accordance with the net retail price (excluding excise and value-added taxes) per cigar, as follows: XT031 (a) Five Hundred Pesos (P500.00) or less Ten Percent XT032 (b) More than Five Hundred Pesos (>P500.00) (10%) of the net XT040 * The tax rate shall in no case be lower than P 1.12 as provided retail price * in the Tax Code of 1997. Fifty Pesos (P50.00) plus Fifteen Percent (15%) of the net retail price in excess of Five Hundred Pesos (P500.00) (4) Cigarettes Packed by Hand Effective January 1, 2005 P 2.00 per pack Effective January 1, 2007 P 2.23 per pack Effective January 1, 2009 P 2.47 per pack Effective January 1, 2011 P 2.72 per pack

Alpha- PRODUCTS NEW TAX numeric RATES Tax Code (ATC) (5) (Cigarettes Packed by Machine Per pack The tax shall be in accordance with the net retail price (excluding excise and value-added taxes) per pack, as follows: XT130 (a) Below Five Pesos (P5.00) Effective January 1, 2005 P 2.00 per pack Effective January 1, 2007 P 2.23 per pack Effective January 1, 2009 P 2.47 per pack Effective January 1, 2011 P 2.72 per pack XT070 (b) Five Pesos (P5.00) but does not exceed Six Pesos and Fifty P 6.35 per pack XT060 Centavos (P6.50) P 6.74 per pack Effective January 1, 2005 P 7.14 per pack P 7.56 per pack Effective January 1, 2007 Effective January 1, 2009 Effective January 1, 2011 (c) More than Six Pesos and Fifty Centavos (>P6.50) but does P 10.35 per pack not exceed Ten Pesos (P10.00) P 10.88 per pack Effective January 1, 2005 P 11.43 per pack Effective January 1, 2007 P 12.00 per pack Effective January 1, 2009 Effective January 1, 2011 XT050 (d) More than Ten Pesos (>P10.00) Effective January 1, 2005 P 25.00 per pack Effective January 1, 2007 P 26.06 per pack Effective January 1, 2009 P 27.16 per pack Effective January 1, 2011 P 28.30 per pack XT080 (6) Tobacco Inspection Fees P 0.50 XT090 P 0.10 XT100 (a) For each thousand cigars or fraction thereof P 0.02 XT110 (b) For each thousand cigarettes or fraction thereof P 0.03 (c) For each kilogram of leaf tobacco or fraction thereof XT120 (d) For each kilogram or fraction thereof of scrap and other leaf - 2 cent./kilo partially manufactured tobacco manufactured (e) Additional imported blending tobacco inspection and (scrap & strips) - 3 cent./kilo monitoring fee

III. The Alphanumeric Tax Code Nos. XA020 and XT030 are hereby dropped. IV. Repealing Clause : This Order supersedes all revenue issuances or portions thereof inconsistent herewith. V. Effectivity : This Order takes effect immediately. (Original Signed) JOSE MARIO C. BU�AG Commissioner of Internal Revenue B-3/jun