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TRAIN Law imposes excise tax on sweetened beverages

 

Section 47 of Republic Act (RA) No. 10963, known as the Tax Reform for Acceleration and Inclusion (TRAIN) adds Section 150-B to the National Internal Revenue Code (NIRC), as amended, which imposes excise tax on sweetened beverages at the following rates:

1. Six pesos (Php6.00) per liter of volume capacity on sweetened beverages using purely caloric sweeteners, and purely non-caloric sweeteners, or a mix of caloric and non-caloric sweeteners; and

2. Twelve pesos (Php12.00) per liter of volume capacity on sweetened beverages using purely high fructose corn syrup or in combination with any caloric or non-caloric sweetener.

 

Why this matters

 

RA No. 10963 will take effect on 01 January 2018. However, the implementing revenue regulations and the applicable tax returns for the excise tax on sweetened beverages have not been released. Thus, affected taxpayers will not have any mechanism to make the corresponding payments of excise taxes.

 

Key Points to Consider

 

The Bureau of Internal Revenue (BIR) has issued Operations Memorandum (OM) No. 2017-12-06, dated 28 December 2017, to provide a work around procedure for the payment of the excise tax until the new Excise Tax Returns for sweetened beverages (BIR Form No. 2200-S January 2018 version) is released.

The OM requires the concerned taxpayers, whether non-large taxpayers or large taxpayers, to use BIR Form No. 0605 for purposes of paying the excise tax. The OM likewise indicates the proper Alphanumeric Tax Code (ATC) to be used in describing the excise tax payments.

Note that Section 150-B states that the existing Sections 130 and 131 of the NIRC, as amended, shall apply as appropriate to the schedule for filing and payment of the excise tax. Hence, the excise tax on domestic sweetened beverages should be paid before their removal from the place of production. The excise tax on imported sweetened beverages should be paid to the appropriate customs officers before their release from the customhouse.

The BIR is expected to release further guidelines on the implementation of Section 150-B.

 

Attached is the copy of OM No. 2017-12-06 for reference. 

Operations Memorandum (OM) No. 2017-12-06

 

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