Prescribing the rules governing the implementation of Section 147(B) of the Tax Code imposing an Ad Valorem tax on fermented liquors in addition to the specific tax levied thereon

October 12, 1984 REVENUE REGULATIONS NO. 15-84 SUBJECT : Prescribing the Rules Governing the Implementation of Section 147(B) of the Tax Code Imposing an Ad Valorem Tax on Fermented Liquors in Addition to the Specific Tax Levied Thereon TO : All Internal Revenue Officers and Others Concerned SECTION 1 . Scope . Pursuant to the provisions of Section 326 in relation to Section 147(B), Chapter I, Title IV of the National Internal Revenue Code of 1977, as amended, the following revenue regulations are hereby promulgated to implement the provisions thereof. SECTION 2 . Words and phrases defined . For purposes of this regulation, the following words and phrases shall be taken in the sense and extension indicated below: (a) Ad valorem tax The ad valorem tax on fermented liquors is an additional levy to the specific tax imposed under Section 147(A) of the Tax Code, equivalent to a specific percentage of the brewer's or importer's gross selling or wholesale price net of the specific tax paid thereon; (b) Gross selling or wholesale price It is the price at which the different brands of fermented liquors are sold in the brewery or in the establishment of the importer or thru the sales agents or through another establishment of which the brewer or importer is the owner or in the profit of which he has an interest; and (c) Sales agent Refers to a sales representative of the brewer or importer under an employee-employer relationship or another establishment of which the manufacturer or importer is the owner or has an interest in the profit thereof . SECTION 3 . Manufacturer's and importer's declaration . Every brewer is required to file with the Commissioner on or before the last working day of January of each year and every six (6) months thereafter or as often as may be required by the Commissioner, a sworn statement showing among others the brand or brands of fermented liquors manufactured, the volume per bottle, the gross sale or wholesale price and the cost of manufacture thereof which shall include the expense incurred or to be incurred until the fermented liquors are finally sold. Provided, further , that said sworn statement shall be filed upon registration of any new brand of fermented liquor or whenever there is any change in the specific tax rates, gross selling or wholesale price of any existing brand of such fermented liquors. aisa dc Every importer of fermented liquors shall file with the Commissioner of Internal Revenue a sworn statement showing among others, the different brands of imported liquors and their corresponding wholesale prices, together with the cost of importation, plus the expenses incurred or to be incurred until finally sold and to be accompanied by verified sales invoice of the brewer of imported fermented liquors and the consular invoice issued by the Philippine Consul. These information must be submitted by the importer to the Commissioner before the removal of imported fermented liquors from customs custody. Based on these declared or registered wholesale prices of imported liquors, the ad valorem tax after deducting the specific tax paid, shall be levied, assessed and collected. The manufacturer's or importer's price of fermented liquors subject to the herein ad valorem tax shall in no case be less than the prevailing wholesale price prior to the effectivity of Presidential Decree No. 1959. SECTION 4 . Computation of ad valorem tax . The computation of the ad valorem tax on fermented liquors shall be as follows: (a) Determine the gross selling wholesale price of the fermented liquors and deduct therefrom the specific tax due thereon to arrive at the wholesale price, net of specific tax; and (b) On the wholesale price, net of specific tax, there shall be levied, assessed and collected the ad valorem tax on fermented liquors of ten (10%) per centum effective October 15, 1984 and an additional ten (10%) per centum effective January 1, 1985. SECTION 5 . Payment of ad valorem tax . Every registered brewer or importer of fermented liquors shall pay before the removal of such liquors from the place of manufacture or from custom's custody the ad valorem tax due thereon to the Commissioner in cash or in manager's check, thru the "Payment Order" system of tax payment; or for his convenience he may pay in advance in cash or in manager's check to the said Commissioner, thru the "Payment Order" system of tax payment, an amount sufficient to cover the ad valorem tax due on the volume of his daily removals. SECTION 6 . Recording ad valorem tax payment . A special book shall be kept by the brewer or importer jointly with the revenue inspector assigned in his brewery or establishment wherein to record the advance ad valorem tax payments. Accordingly, the first advance payment by the brewer for his ad valorem tax liability shall constitute as a debit entry in said book from where the ad valorem tax application shall be deducted and shall constitute as a credit entry in the said book. A balance of the advance payments, if any, shall be struck after every such tax application in order to keep a running account of the same. No removals shall be allowed unless the ad valorem tax is first paid thereon or unless there is sufficient balance of the advance ad valorem tax to be applied thereon, even if the specific tax due thereon has been paid. A debit entry shall only be made in the prescribed special book to record an advance payment of the ad valorem tax, if and when the brewer or importer has shown the original of the revenue payment order and the bank's confirmation receipt issued therefore to the revenue inspector assigned in his establishment who shall sign legibly his name at the back thereof. The said revenue inspector shall always retain a xerox copy of every such payment order and bank confirmation receipt which he will submit on a weekly basis to the Chief, Alcohol Tax Division or to the Chief, Specific Tax Area Team on the first working day following the week. To confirm ad valorem tax payment or application of every removal of fermented liquors, the amount so paid must be indicated in the official tax receipt covering every such removal duly validated by the revenue inspector assigned in the establishment by affixing his signature therein. He shall prepare an abstract of such official tax receipts to be submitted on a weekly basis to the Chief, Alcohol Tax Division or the Chief, Specific Tax Area Team on the first working day following the week. SECTION 7 . Verification of tax payment and costs . To protect the interest of the government and ensure the accurate and prompt payment by the brewer and/or importer of the ad valorem tax for fermented liquors, a periodic verification shall be caused to be made by the Chief, Alcohol Tax Division or Chief, Field Operations Division of such tax payment as well as the registered costs. SECTION 8 . Penalties . The penalties and liabilities prescribed under the penal provisions of Title IV of the Tax Code relative to the payment of specific tax on fermented liquors shall likewise apply in the case of ad valorem tax imposed herein. SECTION 9 . Repealing Clause . All regulations, orders and other issuances or portions hereof not consistent with this regulation are hereby revoked and/or modified. SECTION 10 . Effectivity . This Revenue Regulations shall take effect on October 15, 1984. ALFREDO PIO DE RODA Acting Minister of Finance Recommending Approval: RUBEN B. ANCHETA Acting Commissioner