Publishing Batas Pambansa Blg. 4, Increasing the Rates of Specific Tax on Distilled Spirits and Fermented Liquors and Thereby, Amending Sections 145 and 147 of the National Internal Revenue Code of 1977 as Amended

October 3, 1978 REVENUE MEMORANDUM CIRCULAR NO. 093-78 SUBJECT : Publishing Batas Pa mbansa Bl g. 4, Increasing the Rates of Specific Tax on Distilled Spirits and Fermented Liquors and Thereby, Amending Sections 145 and 147 of the National Internal Revenue Code of 1977 as Amended TO : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, quoted hereunder is Batas Pambansa Blg. 4: "BA TAS PAMBANSA BL G. 4 "AN ACT PROVIDING FOR THE UPWARD REVISION OF THE SPECIFIC TAXES ON ALCOHOLIC BEVERAGES AND AMENDING, FOR THE PURPOSE, SECTIONS 145 and 147 OF THE NATIONAL INTERNAL REVENUE CODE OF 1977, AS AMENDED "Be it enacted by the Batasang Pambansa in session assembled: "SECTION 1. Sections 145 and 147 of the National Internal Revenue Code of 1977 are hereby amended to read as follows: "Sec. 145. Specific tax on distilled spirits . On distilled spirits there shall be collected, subject to the provisions of section one hundred thirty-nine of this Code, except as hereinafter provided, specific taxes as follows: "(a) If produced domestically from locally produced raw materials, per proof liter, one peso and twenty centavos: Provided , That if produced in a pot still or other similar primary distilling apparatus, by a distiller producing not more than one hundred liters a day, containing not more than fifty per centum of alcohol by volume, per proof liter, seventy-eight centavos; "(b) If imported or produced from imported raw materials, per proof liter, thirty-five pesos. "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 be immediately or at any subsequent time transformed into any other substances either in the process of original production or by subsequent process. "Spirits' or 'distilled spirits' is the substance known as ethyl alcohol, ethanol or spirits of wine, including all dilution 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, except compounded liquors taxed under Section 146 of this Code. "Proof spirits is liquor containing one-half of its volume of alcohol of a specific gravity of seven thousand nine hundred and thirty-nine ten thousandths at fifteen degrees centigrade. A proof liter means a liter of proof spirits. "Sec. 147. Specific tax on fermented liquors . On beer, lager beer, ale, porter, and other fermented liquors (except tuba, basi, tapuy and similar domestic fermented liquors), there shall be collected, on each liter of volume capacity, sixty centavos: Provided , That if the fermented liquor is imported, the tax shall be increased by one hundred per centum . "Approved, August 26, 1978." Features of the Amendment : 1. Above-quoted amendatory law has increased the rates of specific tax on distilled spirits and fermented liquors (beer) and thereby, amending pertinent sections of the Tax Code as follows: Rate of Specific Tax Sec. No. Article Tax Base Old New Increase 145 (a) Domestic distilled spirits Proof liter P1.10 P1.20 0.10 If produced by small distillers " 0.78 0.78 None (b) If imported, or produced from raw materials " 27.50 35.00 7.50 147 (a) Domestic fermented liter of liquor (beer) volume capacity 0.50 0.60 0.10 (b) If imported, tax is increased by 100% " 1.00 1.20 0.20 2. The statutory definition of "spirits" or "distilled" spirits" has been amended by the addition of the phrase "except compounded liquors taxed under Section 146 of the Code". The said phrase is now constituted as the new end portion of the definition as amended. This particular amendment has become necessary in view of the restoration of specific tax on domestic compounded liquors which are being sold in the market as "whisky", "brandy", "rum", "gin" or "vodka", the very same names by which imported distilled spirits in bottles are popularly known and purchased by the drinkers thereof. Moreover, compounded liquors are now subject to specific tax per liter of volume capacity, less the tax on alcohol used therefor, while the bottled spirits of foreign manufacture are taxed by the proof liter and at a much higher rate of tax. Effectivity Date : Although Batas Pambansa Blg. 4 was approved on August 26, 1978, it was only on September 8, 1978, when its approval was published in the newspapers. In fairness, therefore, to all concerned the new rates of specific tax on distilled spirits and fermented liquors will be applied by this Office as of the date, on or after August 26 but prior to September 8, 1978, when any manufacturer increased his selling price by reason of the tax increase under the amendatory law. However, where a manufacturer has not increased his selling price between August 26 and September 8, 1978, the new tax rates shall be applied on the latter date or September 8, 1978. In the case of imported distilled spirits and fermented liquors, the new rates of tax shall be applied as of September 8, 1978, the date of publication of Batas Pambansa Blg. 4. cdt All internal revenue officers and other personnel concerned are hereby enjoined to give this Revenue Memorandum Circular the widest publicity possible. EFREN I. PLANA Acting Commissioner