Bitter enforcement of sweet promises?

Bitter enforcement of sweet promises?

by John Paul P Concha


It has been more than a year since the imposition of excise tax on sweetened beverages (SB) which took effect by virtue of Republic Act (RA) No. 10963, otherwise known as the Tax Reform for Acceleration and Inclusion (TRAIN) Law. Since the introduction of this additional excise tax on SB, there has been a lot of questions raised by taxpayers, as well as tax practitioners, on how the Bureau of Internal Revenue (BIR) will enforce and administer the collection and monitoring of the said tax.

bitter enforcement of sweet promises

For a more effective enforcement and collection of excise taxes, the BIR issued Revenue Regulations (RR) No. 20-2018 which prescribes the implementing rules and guidelines on the imposition of excise tax on SB. In this issuance, the BIR imposes an administrative requirement for registered SB producers to submit an Excise Tax Return for SB (BIR Form No. 2200-S) and Excise Taxpayer’s Removal Declaration (ETRD or BIR Form No. 2299) for all removals of SB from its place of production.

In particular, Section 5(a) of RR No. 20-2018 provides that for locally manufactured SB, a separate Excise Tax Return for SB shall be filed for each place of production with the concerned Revenue District Office (RDO) where the Head Office (HO) of the taxpayer is duly registered and the excise tax shall be paid before removal of domestically manufactured SB from the place of production.

Prior to the deployment of BIR Form No. 2200-S, the BIR issued Operations Memorandum (OM) No. 2017-12-06 last 28 December 2017, advising taxpayers subject to excise tax on SB to use the payment form (BIR Form No. 0605) for purposes of paying the excise tax due until the new Excise Tax Return for SB is made available for downloading from the BIR website.

Shortly afterwards, the BIR released Revenue Memorandum Circular (RMC) No. 04-2018 which introduced BIR Form No. 2200-S. On 11 January 2018, such tax return was made available in the BIR website. The aforementioned RMC explicitly provides that for newly introduced tax returns like BIR Form No. 2200-S, the taxpayers should accomplish the tax return as pre-printed or downloaded from the BIR website and file and pay the taxes due thereon manually via over-the-counter of Authorized Agent Banks (AABs) under the jurisdiction of the RDO where the taxpayer is registered.

Considering the foregoing, it is implied that the use of BIR Form No. 0605 prescribed by OM No. 2017-12-06 shall only be observed until 11 January 2018 and the taxpayers subject to excise tax on SB, whether classified as large taxpayers or non-large taxpayers and whether registered or not in the electronic filing and payment system (eFPS) facility of the BIR, shall use BIR Form No. 2200-S and follow the manual filing and payment procedures set forth under RMC No. 04-2018.

Apart from the Excise Tax Return for SB, Section 17(d) of RR No. 20-2018 states that all local manufacturers of SB are required to submit ETRD/s to BIR’s designated e-mail address ( on a weekly basis, together with the summary list of removals and liquidation statement of advance deposits and application as supporting attachments to BIR Form No. 2200-S.

In accordance with the BIR guidelines and instructions on accomplishing BIR Form No. 2299, the same shall be accomplished for each and every withdrawal, transfer, and disposal of excisable articles, intermediate products or regulated raw materials from any of the designated place of production, assembly, extraction, warehouse, depot or other storage facility. The ETRD shall be prepared before effecting any removal of excisable articles, intermediate products or regulated raw materials and shall accompany the shipment thereof.

Having to manually accomplish and file BIR Form No. 2200-S for every removal of SB from each place of production, which may entail several filings on a daily basis depending on the frequency of SB removals and the number of places of production, is a very tedious process for taxpayers subject to the excise tax. However, while it may be a very tedious process, taxpayers have no option at this time but to comply with the manner of filing and payment of excise tax on SB set forth under RMC No. 04-2018 and RR No. 20-2018.  It may be worthwhile though for the BIR to revisit the requirement on the manual filing and payment of the excise tax on SB.

Moreover, the BIR may also consider developing an enhanced version of BIR Form No. 2299, which seems to have been patterned after similar BIR form prescribed for other excisable articles that were already existing prior to the effectivity of the TRAIN Law because it contains fields which may not be applicable to excise tax on SB (e.g. serial nos. of official labels, hydrometer and thermometer reading, etc.). An examination of the said BIR form shows that SB manufacturers are not included in the list of taxpayers who are required to prepare/issue ETRD as provided in the guidelines and instructions at the back of the said form. Neither is there a box provided for SB which the affected taxpayers may tick in accomplishing the ETRD. For easier compliance by affected taxpayers, it may be helpful if there is a clearer guidance on how to properly accomplish the ETRD for excise tax on SB. In the meantime, taxpayers subject to excise tax on SB are mandated to accomplish the required form the best way they can by disclosing the information that the BIR may need for the purpose of ensuring substantial compliance with the BIR’s requirements.

One of the keys for effective enforcement and better collection of taxes is to ensure that the administrative rules and requirements are simple and not costly for taxpayers to comply. This means enabling online filing rather than manual filing, less frequent tax filings, and simple forms that clearly define the required information. Having simple rules that may lead to higher compliance level on the part of taxpayers is a win-win solution for the government and taxpayers – additional revenues may be generated that may be used for public health and wellness programs to combat alarming cases of obesity and diabetes in the country due to excessive consumption of sweetened drinks.

John Paul P. Concha is a Supervisor from the Tax Group of KPMG R.G. Manabat & Co. (KPMG RGM&Co.), the Philippine member firm of KPMG International. KPMG RGM&Co. has been recognized as a Tier 1 tax practice and Tier 1 transfer pricing practice by the International Tax Review.

This article is for general information purposes only and should not be considered as professional advice to a specific issue or entity.

The views and opinions expressed herein are those of the author and do not necessarily represent the views and opinions of KPMG International or KPMG RGM&Co. For comments or inquiries, please email or

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