MANILA, Philippines — The Bureau of Internal Revenue (BIR) has released the guidelines for the imposition of excise tax on sugar-sweetened beverages, pursuant to the Tax Reform for Acceleration and Inclusion (TRAIN) Act.
The BIR issued Revenue Regulations 20-2018, dated July 25, 2018 and signed by Finance Secretary Carlos Dominguez and Internal Revenue commissioner Caesar Dulay, prescribing the implementing rules and guidelines on sugar-sweetened beverage tax.
Under the guidelines, beverages using purely caloric sweeteners, purely non-caloric sweeteners or a mix of both should be levied an excise tax rate of P6 per liter of volume capacity. Drinks with purely high fructose corn syrup or in combination with any caloric or non-caloric sweetener are also imposed an excise tax rate of P12 per liter.
Meanwhile, beverages containing purely coconut sap sugar and purely steviol glycosides are exempt from the excise tax. The issuance also exempts all milk products; soymilk or flavored soymilk; 100 percent natural fruit juices; 100 percent natural vegetable juices; meal replacement and medically indicated beverages; and ground coffee, instant soluble coffee and pre-packaged powdered coffee.
For locally manufactured sweetened beverages, the manufacturer or the person in possession of the products should file BIR Form 2200-S with the concerned BIR Office and pay the excise tax before removal of the goods from the place of production.
For imported beverages, all owners or importers, whether importing raw materials or finished goods, are required to apply for an Authority to Release Imported Goods with the Excise Large Taxpayer Regulatory Division of the BIR.
The excise tax on imported finished goods should be paid before release from customs custody. For imported raw materials which will be used in the production of sweetened beverages, the excise tax due should be paid before the removal of finished goods from place of production.
Manufacturers of sweetened beverages subject to tax are not allowed to transfer or remove raw materials from place of production, except when it is intended for further processing to other registered production plants.
Semi-processed goods, such as syrups, puree or concentrates sold to fast food chains will be considered as finished goods subject to excise tax.
Beverages consumed within the place of production will also be subject to the payment of excise tax by the manufacturer.
On the other hand, sweetened beverages intended for exports may be removed from the place or production without the payment of excise tax, subject to conditions laid out in the issuance.
According to the BIR, taxpayers engaged in the manufacturing and importation of sweetened beverages should update on or before Aug. 31 their Certificate of Registration with the BIR.