BA 128 Readings

REPUBLIC ACT NO.
9178
AN ACT TO PROMOTE THE ESTABLISHMENT OF BARANGAY MICRO

BUSINESS ENTERPRISES (BMBEs), PROVIDING INCENTIVES AND
BENEFITS THEREFOR, AND FOR OTHER PURPOSES
PRELIMINARY PROVISIONS
Section 1. Short Title. — This Act shall be known as the "Barangay Micro
Business Enterprises (BMBEs) Act of 2002."
Sec. 2. Declaration of Policy. — It is hereby declared to be the policy of the

State to hasten the country's economic development by encouraging the
formation and growth of barangay micro business enterprises which effectively
serve as seedbeds of Filipino entrepreneurial talents, and integrating those in the
informal sector with the mainstream economy, through the rationalization of
bureaucratic restrictions, the active intervention of the government specially in
the local level, and the granting of incentives and benefits to generate much-
needed employment and alleviate poverty.
Sec. 3. Definition of Terms. — As used in this Act, the following terms shall
mean:
(a) "Barangay Micro Business Enterprise," hereinafter referred to as BMBE,

refers to any business entity or enterprise engaged in the production, processing
or manufacturing of products or commodities, including agro-processing, trading
and services, whose total assets including those arising from loans but exclusive
of the land on which the particular business entity's office, plant and equipment
are situated, shall not be more than Three Million Pesos (P3,000,000.00). The
above definition shall be subject to review and upward adjustment by the SMED
Council, as mandated under Republic Act No. 6977, as amended by Republic
Act No. 8289.
For the purpose of this Act, "services" shall exclude those rendered by any one,
who is duly licensed by the government after having passed a government
licensure examination, in connection with the exercise of one's profession.
(b) "Certificate of Authority" is the certificate issued granting the authority to the
registered BMBE to operate and be entitled to the benefits and privileges
accorded thereto.
(c) "Assets" refers to all kinds of properties, real or personal, owned by the
BMBE and used for the conduct of its business as defined by the SMED Council:
Provided, That for the purpose of exemption from taxes and fees under this Act,
this term shall mean all kinds of properties, real or personal, owned and/or used
by the BMBE for the conduct of its business as defined by the SMED Council.
(d) "Registration" refers to the inclusion of BMBE in the BMBE Registry of a city
or municipality.
(e) "Financing" refers to all borrowings of the BMBE from all sources after
registration.
REGISTRATION AND OPERATION OF BMBEs
Sec. 4. Registration and Fees. — The Office of the Treasurer of each city or
municipality shall register the BMBEs and issue a Certificate of Authority to
enable the BMBE to avail of the benefits under this Act. Any such application
shall be processed within fifteen (15) working days upon submission of complete
documents. Otherwise, the BMBEs shall be deemed registered. The Municipal or
City Mayor may appoint a BMBE Registration Officer who shall be under the
Office of the Treasurer. Local government units (LGUs) are encouraged to
establish a One-Stop-Business Registration Center to handle the efficient
registration and processing of permits/licenses of BMBEs. Likewise, LGUs shall
make a periodic evaluation of the BMBEs' financial status for monitoring and
reporting purposes.
The LGUs shall issue the Certificate of Authority promptly and free of charge.
However, to defray the administrative costs of registering and monitoring the
BMBEs, the LGUs may charge a fee not exceeding One Thousand Pesos
(P1,000.00).
The Certificate of Authority shall be effective for a period of two (2) years,
renewable for a period of two (2) years for every renewal.
As much as possible, BMBEs shall be subject to minimal bureaucratic

requirements and reasonable fees and charges.
Sec. 5. Who are Eligible to Register. — Any person, natural or juridical, or

cooperative, or association, having the qualifications as defined in Sec. 3(a)
hereof may apply for registration as BMBE.
Sec. 6. Transfer of Ownership. — The BMBE shall report to the city or

municipality of any change in the status of its ownership structure, and shall
surrender the original copy of the BMBE Certificate of Authority for notation of the
transfer.
INCENTIVES AND BENEFITS
Sec. 7. Exemption from Taxes and Fees. — All BMBEs shall be exempt from
income tax for income arising from the operations of the enterprise.
The LGUs are encouraged either to reduce the amount of local taxes, fees and
charges imposed or to exempt the BMBEs from local taxes, fees and charges.
Sec. 8. Exemption from the Coverage of the Minimum Wage Law. — The
BMBEs shall be exempt from the coverage of the Minimum Wage Law: Provided,
That all employees covered under this Act shall be entitled to the same benefits
given to any regular employee such as social security and healthcare benefits.
Sec. 9. Credit Delivery. — Upon the approval of this Act, the Land Bank of the
Philippines (LBP), the Development Bank of the Philippines (DBP), the Small
Business Guarantee and Finance Corporation (SBGFC), and the People's Credit
and Finance Corporation (PCFC) shall set up a special credit window that will
service the financing needs of BMBEs registered under this Act consistent with
the Bangko Sentral ng Pilipinas (BSP) policies, rules and regulations. The
Government Service Insurance System (GSIS) and Social Security System
(SSS) shall likewise set up a special credit window that will serve the financing
needs of their respective members who wish to establish a BMBE. The
concerned financial institutions (FIs) are encouraged to wholesale the funds to
accredited private financial institutions including community-based organizations
such as credit, cooperatives, non-government organizations (NGOs) and
people's organizations, which will in turn, directly provide credit support to
BMBEs.
All loans from whatever sources granted to BMBEs under this Act shall be
considered as part of alternative compliance to Presidential Decree No. 717,
otherwise known as the Agri-Agra Law, or to Republic Act No. 6977, known as
the Magna Carta for Small and Medium Enterprises, as amended. For purposes
of compliance with Presidential Decree No. 717 and Republic Act No. 6977, as
amended, loans granted to BMBEs under this Act shall be computed at twice the
amount of the face value of the loans.
Any existing laws to the contrary notwithstanding, interests, commissions and

discounts derived from the loans by the LBP, DBP, PCFC and SBGFC granted to
BMBEs as well as loans extended by the GSIS and SSS to their respective
member-employees under this Act shall be exempt from gross receipts tax
(GRT).
To minimize the risks in lending to the BBEs, the SBGFC and the Quedan and
Rural Credit Guarantee Corporation (QUEDANCOR) under the Department of
Agriculture, in case of agribusiness activities, shall set up a special guarantee
window to provide the necessary credit guarantee to BMBEs under their
respective guarantee programs.
The LBP, DBP, PCFC, SBGFC, SSS, GSIS, and QUEDANCOR shall annually
report to the appropriate Committees of both Houses of Congress on the status
of the implementation of this provision.
The BSP shall formulate the rules for the implementation of this provision and
shall likewise establish incentive programs to encourage and improve credit
delivery to the BMBEs.
Sec. 10. Technology Transfer, Production and Management Training, and

Marketing Assistance. — A BMBE Development Fund shall be set up with an
endowment of Three Hundred Million Pesos (P300,000,000.00) from the
Philippine Amusement and Gaming Corporation (PAGCOR) and shall be
administered by the SMED Council.
The Department of Trade and Industry (DTI), the Department of Science and
Technology (DOST), the University of the Philippines Institute for Small Scale
Industries (UP ISSI), Cooperative Development Authority (CDA), Technical
Education and Skills Development Authority (TESDA), and Technology and
Livelihood Resource Center (TLRC) may avail of the said Fund for technology
transfer, production and management training and marketing assistance to
BMBEs.
The DTI, in coordination with the private sector and non-government

organizations (NGOs), shall explore the possibilities of linking or matching-up
BMBEs with small, medium and large enterprises, and likewise establish
incentives therefor.
The DTI, in behalf of the DOST, UP ISSI, CDA, TESDA and TLRC shall be
required to furnish the appropriate Committees of both Houses of Congress a
yearly report on the development and accomplishments of their projects and
programs in relation to technology transfer, production and management training
and marketing assistance extended to BMBEs.
Sec. 11. Trade and Investment Promotion. — The data gathered from business
registration shall be made accessible to and shall be utilized by private sector
organizations and non-government organizations for purposes of business
matching, trade and investment promotion.
Sec. 12. Information Dissemination. — The Philippine Information Agency (PIA),

in coordination with the Department of Labor and Employment (DOLE), the DILG
and the DTI, shall ensure the proper and adequate information dissemination of
the contents and benefits of this Act to the general public especially to its
intended beneficiaries specifically in the barangay level.
PENALTY
Sec. 13. Penalty. — Any person who shall willfully violate any provision of this
Act or who shall in any manner commit any act to defeat any provision of this Act
shall, upon conviction, be punished by a fine of not less than Twenty-five
Thousand Pesos (P25,000.00) but not more than Fifty Thousand Pesos
(P50,000.00) and suffer imprisonment of not less than six (6) months but not
more than two (2) years.
In case of non-compliance with the provisions of Sec. 9 of this Act, the BSP shall
impose administrative sanctions and other penalties on the concerned
government financial institutions, including a fine of not less than Five Hundred
Thousand Pesos (P500,000.00).
MISCELLANEOUS PROVISIONS
Sec. 14. Annual Report. — The DILG, DTI, and BSP shall submit an annual
report to the Congress on the status of the implementation of this Act.
Sec. 15. Implementing Rules and Regulations. — The Secretary of the

Department of Trade and Industry, in consultation with the Secretaries of the
DILG, DOF, and the BSP Governor shall formulate the necessary rules and
regulations to implement the provisions of this Act within ninety (90) days after its
approval. The rules and regulations issued pursuant to this Sec. shall take effect
fifteen (15) days after its publication in a newspaper of general circulation.
Sec. 16. Separability Clause. — If any provision or part hereof, is held invalid or
unconstitutional, the remainder of the law or the provision not otherwise affected
shall remain valid and subsisting.
Sec. 17. Repealing Clause. — Existing laws, presidential decrees, executive

orders, proclamations or administrative regulations that are inconsistent with the
provisions of this Act are hereby amended, modified, superseded or repealed
accordingly.
Sec. 18. Effectivity. — This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in at least two (2) newspapers of general
circulation.
Approved: November 13, 2002

Chapter XI
LOCAL TAXES371
Local government units (LGUs) derive their revenues from local

and external sources. Local sources include tax revenues from the real
property tax and the business tax, and non-tax revenues from fees and
charges, receipts from government business operations and proceeds from
sale of assets. External sources, on the other hand, include the Internal
Revenue Allotment (IRA) and other shares from special laws, grants and
aids and borrowings.
I. TAXING POWERS OF LOCAL GOVERNMENTS
A. Taxes on Real Property
a. Basic Real Property Tax
The real property tax (RPT) is an ad valorem tax on

real properties such as lands, buildings, and other improvements,
and machineries imposed by provinces, cities and municipalities
within the Metropolitan Manila Area (MMA), at the following
rates:372
371
Book II, Title One of RA 7160, otherwise known as the “Local Government
Code of 1991”.
372
Section 233, supra.
220 Guide to Philippine Taxes

Chapter XI Local Taxes
Provinces - Not exceeding 1% of the

assessed value of the real
property; and
Cities or Municipalities - Not exceeding 2% of the

within the MMA assessed value of the real
property
The RPT is based on the assessed value which is a certain

percentage of the market value of the real property. The assessed
value is arrived at upon application of the assessment levels to the
market value of the property. The assessment levels are fixed by
ordinance of the local Sanggunian depending on the actual use of
the property, at rates not exceeding the following:373
(1) Lands
Class Assessment Levels
Residential 20%
Agricultural 40%
Commercial, Industrial and Mineral 50%
Timberland 20%
(2) Buildings and Other Structures
The rate progresses directly with the fair market value

(FMV) as follows:
Residential – 0% for those with FMV of

PhP175,000.00 or less to 60% for those with FMV of
more than PhP10 million.
373
Section 218, supra.
Guide to Philippine Taxes 221

Agricultural – 25% for those with FMV of

Commercial/Industrial – 30% for those with FMV of

Timberland – 45% for those with FMV of

(3) Machineries
Class Assessment Levels
Agricultural 40%
Residential 50%
Commercial and Industrial 80%
(4) Special Classes. The assessment levels for all lands, buildings,
machineries, and other improvements are as follows:
Actual Use Assessment Levels
Cultural 15%
Scientific 15%
Hospital 15%
Local Water Districts 10%
Government-owned or controlled 10%
corporations engaged in the supply
and distribution of water and/or
generation and transmission of
electric power

Exemptions: The following are exempted from payment of

the RPT: 374
Real property owned by the Republic of the Philippines or

any of its political subdivisions, except when the beneficial
use thereof has been granted, for consideration or otherwise,
to a taxable person;
Charitable institutions, churches, parsonages, or convents

appurtenant thereto, mosques, non-profit or religious
cemeteries, and all lands, buildings, and improvements
actually, directly, and exclusively used for religious, charitable
or educational purposes;
All machineries and equipment that are actually, directly and

exclusively used by local water districts and government-
owned or–controlled corporations (GOCCs) engaged in the
supply and distribution of water and/or generation and
transmission of electric power;
All real property owned by duly registered cooperatives as

provided for under RA 6938; and
Machinery and equipment used for pollution control and

environment protection.
Except as provided in the LGC, any exemption from the payment

of RPT previously granted to or presently enjoyed by, all persons, whether
natural or juridical, including all GOCCs were withdrawn upon the
effectivity of the LGC.
374
Section 234, supra.

b. Special Levies on Real Property
(1) Special Education Fund Tax375
In addition to the basic RPT, a province or city, or a

municipality within the MMA may levy and collect an annual
tax of 1% on the assessed value of real property which shall
be in addition to the basic RPT. The proceeds thereof shall
exclusively accrue to the Special Education Fund (SEF) to
support public education.
(2) Idle Lands Tax376
A province or city, or a municipality within the MMA

may levy an annual tax on idle lands at a rate not exceeding
5% of the assessed value of the property which shall be in
addition to the basic RPT.
Coverage377
(a) Agricultural lands, more than one (1) hectare in area,

suitable for cultivation, dairying, inland fishery, and
other agricultural uses, one-half (1/2) of which remain
uncultivated or unimproved. Not considered as idle
lands are (i) agricultural lands planted to permanent or
perennial crops with at least fifty (50) trees to a hectare,
and (ii) lands actually used for grazing purposes.
(b) Lands, other than agricultural, located in a city or

municipality more than one thousand (1,000) square
375
Section 235, supra.
376
Section 236, supra.
377
Section 237, supra.

meters in area, one-half of which remain unutilized or

unimproved.
Regardless of land area, the tax shall likewise apply

to residential lots in subdivisions duly approved by proper
authorities, the ownership of which has been transferred
to individual owners, who shall be liable for the additional
tax.
Exemption378
The LGU may exempt idle lands from the additional

levy by reason of force majeure, civil disturbance, natural
calamity or any cause or circumstance which physically or
legally prevents the owner of the property or person having
legal interest therein from improving, utilizing or cultivating
the same.
(3) Special Levy379
A province, city or municipality may impose a special

levy on the lands within its territorial jurisdiction specially
benefitted by public works projects or improvements funded
by the LGU concerned. The special levy shall not exceed
60% of the actual cost of such projects and improvements,
including the costs of acquiring land and such other real
property in connection therewith.
The special levy shall not apply to lands exempt from

basic RPT and the remainder of the land portions of which
have been donated to the LGU concerned for the construction
of such projects or improvements.
378
Section 238, supra.
379
Section 240, supra.

(4) Other Impositions on Real Property
a. Socialized Housing Tax380
In addition to the RPT and SEF tax, a socialized

housing tax may also be imposed by a province, city or
municipality within the MMA. The tax is 1/2 of 1% of the
assessed value of all lands in urban areas in excess of
PhP50,000.00.
b. Tax on Transfer of Real Property Ownership381
A province, city or municipality within the MMA

may impose a tax on the sale, donation, barter, or any
other mode of transferring ownership or title of real property
at the rate of not more than 50% of 1% in the case of a
province and 75% of 1% in the case of a city or a
municipality in MMA of the total consideration involved in
the acquisition of the property or of the FMV in case the
monetary consideration involved in the transfer is not
substantial, whichever is higher.
The sale, transfer or other disposition of real

property pursuant to RA 6657 (Comprehensive Agrarian
Reform Law of 1988) shall be exempt from the tax.
(5) Collection of Real Property Tax 382
The real property tax for any year shall accrue on the
first day of January. The basic RPT and the additional SEF tax
380
Section 43, RA 7279, otherwise known as the “Urban Development and
Housing Act of 1992”, as implemented by Local Circular No. 1-97, dated April 16, 1997.
381
Section 135, LGC.
382
Sections 135, 245, 246 and 250, supra.

may be paid without interest in four (4) equal installments; the

first installment to be due and payable on or before March 31;
the second installment, on or before June 30; the third
installment, on or before September 30; and the last installment
on or before December 31.
The special levy shall accrue on the first day of the

quarter next following the effectivity of the ordinance imposing
such levy. Its payments shall be governed by the ordinance of
the Sanggunian concerned.
The tax on transfer of real property ownership shall

be paid within sixty (60) days from the date of the execution of
the deed or from the date of the decedent’s death.
The date for the payment of any other tax on real

property shall be prescribed by the Sanggunian concerned.
B. Other Local Taxes
Local government units are empowered to impose the following

taxes:
1. Provincial Taxes383
a. Tax on business of printing and publication at a rate not exceeding

50% of 1% of the gross annual receipts for the preceding
calendar year. In case of newly started business, the tax shall
not exceed 1/20 of 1% of the capital investment.384
b. Tax on a business enjoying franchise at a rate not exceeding

50% of 1% of the gross annual receipts for the preceding
383
Section 134, supra.
384
Section 136, supra.

calendar year. In case of a newly started business, the tax

shall not exceed 1/20 of 1% of the capital investment.385
c. Tax on sand, gravel and other quarry resources at a rate

not exceeding 10% of the fair market value in the locality
per cubic meter of ordinary stones, sand, gravel, earth, and
other quarry resources, as defined under the National
Internal Revenue Code (NIRC), as amended, extracted
from public lands or from the beds of seas, lakes, rivers,
streams, creeks, and other public waters within its territorial
jurisdiction.386
d. Professional tax on each person engaged in the exercise or

practice of his/her profession requiring government
examination at a rate not exceeding PhP300.00.387
e. Amusement tax payable by proprietors, lessees, or

operators of theaters, cinemas, concert halls, circuses,
boxing stadia, and other places of amusement at a rate of
not more than 10% of the gross receipts from admission
fees.388
f. Annual fixed tax not exceeding PhP500.00 for every

delivery truck or van used by manufacturers, producers,
wholesalers, dealers or retailers in the delivery or distribution
of distilled spirits, fermented liquors, soft drinks, cigars and
cigarettes, to sales outlets, or consumers, whether directly
or indirectly, within the province.389
385
Section 137, supra.
386
Section 138, supra.
387
Section 139, supra.
388
Section 140, amended by RA 9640, approved on May 21, 2009.
389
Section 141, supra.

2. Municipal Taxes390
a. Business Taxes
There are three (3) kinds of business taxes imposed

by municipalities: (a) a combination of a graduated-fixed and
percentage business taxes; (b) percentage tax; and (c) annual
tax.
The following are subject to a combination of a

graduated-fixed and percentage business taxes:
(1) Manufacturers, assemblers, repackers, processors,

brewers, distillers, rectifiers, and compounders of liquors,
distilled spirits, and wines or manufacturers of any article
of commerce of whatever kind or nature at rates ranging
from PhP165.00 for gross receipts of less than
PhP10,000.00 to PhP24,375.00 for gross receipts of
PhP5 million to PhP6,499,999.00. Those with gross
receipts of PhP6,500,000.00 or more are taxed at a
rate of not exceeding 37 1/2% of 1% of the gross
receipts.391
(2) Wholesalers, distributors, or dealers in any article of

commerce of whatever kind or nature at rates ranging
from PhP18.00 for gross receipts of less than
receipts of PhP2 million or more are taxed at a rate of
not exceeding 50% of 1% of the gross receipts.392
390
Section 142, supra.
391
Section 143 (a), supra.
392
Section 143 (b), supra.

(3) Exporters, and manufacturers, millers, producers,

wholesalers, distributors, dealers or retailers of essential
commodities are subject to not more than one-half
(1/2) of the rates prescribed for manufacturers
wholesalers and retailers of other products.393
(4) Contractors and other independent contractors at rates

ranging from PhP27.50 for gross receipts of less than
receipts of PhP2 million or more are taxed at a rate of
not exceeding 50% of 1% of the gross receipts.394
Percentage taxes are imposed on the following:
(1) Retailers, at rates of 2% for gross receipts of

PhP400,000.00 or less and 1% for gross receipts over
PhP400,000.00.395
(2) Banks and other financial institutions at a rate not

exceeding 50% of 1% of the gross receipts of the
preceding calendar year derived from interest,
commissions and discounts from lending activities, income
from financial leasing, dividends, rentals, on property and
profit from exchange or sale of property, insurance
premium.396
(3) Any business, not otherwise specified in the preceding

paragraph at a rate to be determined by the local
393
Section 143 (c), supra.
394
Section 143 (e), supra.
395
Section 143 (d), supra. Barangays have exclusive power to levy taxes on
gross sales or receipts of P50,000 or less in the case of cities, and P30,000 or less, in the
case of municipalities.
396
Section 143 (f), supra.

Sanggunian. If the business is subject to the excise,

VAT or percentage tax under the NIRC, the rate shall
not exceed 2% of the gross sales or receipts of the
preceding calendar year.397
Annual tax on peddlers engaged in the sale of any

merchandise or article of commerce, at a rate not exceeding
PhP50.00 per peddler.398
3. City Taxes399
The city government may impose and collect any of the

taxes, fees and charges imposed by the province or municipality.
The rates of taxes may exceed the maximum rates allowed for
the province or municipality by not more than 50% except the
rates of professional and amusement taxes which are already
fixed.
4. Barangay Taxes400
The barangay may impose a tax on stores or retailers

with fixed business establishments with annual gross sales or
receipts of PhP50,000.00 or less in the case of cities; and
PhP30,000.00 or less, in the case of municipalities, at a rate
not exceeding 1% of gross sales or receipts.
397
Section 143 (h), supra.
398
Section 143 (g), supra.
399
Section 151, supra.
400
Section 152, supra.

5. Community Tax401
City and municipal government may impose a community

tax at the following rates:
a. Individuals
Basic community tax ………………………....... PhP5.00
Additional tax –
For every PhP1,000.00 of income .…............ PhP1.00
The tax, however, shall in no case exceed

PhP5,000.00.
b. Corporations
Basic community tax………………………... PhP500.00
Additional tax –
For every PhP5,000.00 worth of

real property …......................................... PhP2.00
For every PhP5,000.00 worth of gross receipts/

earnings derived from business…………... PhP2.00
The tax, however, shall in no case exceed

PhP10,000.00.
401
Section 156, supra.

Exemptions402
The following are exempt from the community tax:
Diplomatic and consular representatives; and
Transient visitors when their stay in the Philippines does not

exceed three (3) months.
C. Other Revenue-Raising Powers of Local Governments
1. Common403
a. Service Fees and Charges
LGUs may impose and collect such reasonable fees

and charges.
b. Public Utility Charges
LGUs may fix the rates for the operation of public

utilities owned, operated and maintained by them within their
jurisdiction.
c. Toll Fees and Charges
LGUs may prescribe the terms and conditions and

fix the rates for the imposition of toll fees or charges for the
use of any public road, pier or wharf, waterway, bridge, ferry
or telecommunication system funded and constructed by the
LGU concerned.
402
Section 159, supra.
403
Sections 153, 154, and 155, supra.

2. Municipalities
a. Fees and charges on business and occupation and, except as

reserved to the province in Section 139 of the LGC, on the
practice of any profession or calling, commensurate with the
cost of regulation, inspection and licensing at rates to be
prescribed by the Sangguniang Bayan.404
b. Fees for the sealing and licensing of weights and measures at

rates to be prescribed by the Sangguniang Bayan.405
c. Rentals, fees or charges on the use of municipal waters at

rates prescribed by the Sangguniang Bayan.406
3. Cities407
Fees and charges imposed by the province or municipality.
4. Barangays408
Fees and charges:
(a) For services rendered in connection with the regulation or the

use of barangay-owned properties or service facilities.
404
Section 147, supra.
405
Section 148, supra.
406
Section 149, supra.
407
Section 151, supra.
408
Section 152 (b), (c) and (d), supra.

(b) For the issuance of a barangay clearance for any business or

activity located or conducted within the territorial jurisdiction
of the barangay before the city or municipality may issue a
license or permit to said business or activity.
(c) On commercial breeding of fighting cocks, cockfights and

cockpits.
(d) On places of recreation which charge admission fees.
(e) On billboards, signboards, neon signs, and outdoor

advertisement.
D. Collection of Taxes, Fees and Charges409
All local taxes, fees and charges shall accrue on the first day of
January of each year. However, new taxes, fees or charges, or changes
in the rates thereof, shall accrue on the first (1st) day of the quarter next
following the effectivity of the ordinance imposing such new levies or
rates.
All local taxes, fees and charges shall be paid within the first
twenty (20) days of January or of each subsequent quarter, as the case
may be. The payments may be made in quarterly installments.
409
Sections 165, 166 and 167, supra.

Chapter VI
DOCUMENTARY STAMP TAX
The documentary stamp tax is an excise tax levied on documents,

instruments, loan agreements and papers evidencing the acceptance, assignment,
sale or transfer of an obligation, rights, or property incident thereto. The amount
of tax is either fixed or based on the par or face value of the document or
instrument.
The tax is paid by the person making, signing, issuing, accepting or

transferring the documents. However, whenever one party to the taxable
document enjoys exemption from the tax, the other party thereto who is not
exempt shall be the one directly liable for the tax.
Except as otherwise provided by rules and regulations, the tax return

shall be filed and the tax due shall be paid at the same time within 10 days after
the close of the month when the taxable document was signed, issued, accepted
or transferred. In lieu of the foregoing, the tax may be paid either through
purchase of DST stamp and actual affixture, or by imprinting a secured stamp
on the taxable document through the web-based Electronic Documentary Stamp
EO System.
Tax (eDST) 22
Failure to stamp a taxable document shall not invalidate the same.

However, it shall not be recorded (i.e. in the Registry of Deeds) or admitted or
used as evidence in any court until the requisite stamp is affixed thereto and
cancelled. Furthermore, no notary or other officer authorized to administer
oaths shall add his jurat or acknowledgment to the document unless the proper
documentary stamp is affixed thereto and cancelled.

Chapter VI Documentary Stamp Tax
The documentary stamp taxes payable on documents or instruments

are as follows:
Documents/Instruments Tax Rate
1. Original issue of shares of stock (Sec. 174) PhP1.00 per PhP200,

or fraction thereof, of
the par value
2. Sales, agreements to sell, memoranda of PhP0.75 per PhP200,

sales, deliveries or transfer of shares or or fraction thereof, of
certificates of stock (Sec. 175) the par value
3. Bonds, debentures, certificates of stocks PhP1.00 per PhP200,

or indebtedness issued in foreign countries or fraction thereof, of
(Sec. 176) the face/par value
4. Certificates of profits or interest in property PhP0.50 per PhP200,

or accumulations (Sec. 177) or fraction thereof, of
the face value
5. Bank checks, drafts, certificates of deposit PhP1.50 per check,

not bearing interest and other instruments draft or certificate
(Sec. 178)
6. Debt instruments313 (Sec. 179) PhP1.00 per PhP200,

or fraction thereof,
of the issue price
313
Debt instrument shall mean instruments representing borrowing and lending
transactions including but not limited to debentures, certificates of indebtedness, due
bills, bonds, loan agreements, including those signed abroad wherein the object of
contract is located or used in the Philippines, instruments and securities issued by the
government or any of its instrumentalities, deposit substitute debt instruments,
certificates or other evidences of deposits that are either drawing interest significantly
higher than the regular savings deposit taking into consideration the size of the deposit
and the risks involved or drawing interest and having a specific maturity date, orders for
payment of any sum of money otherwise than at sight or on demand, promissory notes,
whether negotiable or non-negotiable, except bank notes issued for circulation.

7. Bills of exchange or drafts (Sec. 180) PhP0.30 per PhP200,

or fraction thereof, of
the face value
8. Acceptance of bills of exchange and PhP0.30 per PhP200,

others (Sec. 181) or fraction thereof, of
the face value
9. Foreign bills of exchange and letters of PhP0.30 per PhP200,

credit (Sec. 182) or fraction thereof,
of the face value
10. Life Insurance Policies (Sec. 183)314
a. If the amount of insurance does not exempt

exceed PhP100,000.00
b. If the amount of insurance exceeds PhP10.00

PhP100,000.00 but does not exceed
PhP300,000.00
c. If the amount of insurance exceeds PhP25.00

PhP500,000.00
For debt instruments with terms of less than one (1) year, the documentary stamp
tax to be collected shall be of a proportional amount in accordance with the ratio of its
term in number of days to three hundred sixty-five (365) days.
314
RA 10001, “An Act Reducing the Taxes on Life Insurance Policies, Amending
For This Purpose Sections 123 and 183 of the National Internal Revenue Code of 1997,
As Amended”, signed into law on February 23, 2010.
Five years after the effectivity of RA 10001, all policies of insurance or other
instruments by whatever name the same shall be called whereby any insurance shall be
made upon any life or lives shall be exempt from the documentary stamp tax.

d. If the amount of insurance exceeds PhP50.00

PhP750,000.00
e. If the amount of insurance exceeds PhP75.00

PhP1,000,000.00
f. If the amount of insurance exceeds PhP100.00

PhP1,000,000.00
11. Policies of insurance upon property PhP0.50 on each

(Sec. 184) PhP4.00, or fraction
thereof, of the amount
of premium charged
12. Fidelity bonds and other insurance PhP0.50 on each

policies (Sec. 185) PhP4.00, or fraction
thereof, of the amount
of premium charged
13. Policies of annuities and pre-need

plans (Sec. 186)
Annuities PhP0.50 per PhP200,

or fraction thereof, of the
premium or installment
payment or contract
price collected
Pre-need plans PhP0.20 per PhP200,

or faction thereof, of the
premium or contribution
collected

14. Indemnity bonds (Sec. 187) PhP0.30 on each

PhP4.00, or fraction
thereof, of the
premium charged
15. Certificates (Sec. 188) PhP15.00
16. Warehouse receipts (Sec. 189) PhP15.00
17. Jai-alai and horse race tickets, lotto or other PhP0.10/ticket worth
authorized numbers games (Sec. 190) PhP1.00 and additional
PhP0.10 for each
PhP1.00 in excess
of PhP1.00
18. Bills of Lading or receipts (Sec. 191)
a. Value exceeding P100 but not over PhP1.00
b. Value exceeding P1,000 PhP10.00
19. Proxies (Sec. 192) PhP15.00
20. Powers of attorney (Sec. 193) PhP5.00
21. Leases and other hiring agreements PhP3.00 for the first
(Sec. 194) PhP2,000, or fraction
thereof, and additional
PhP1.00 for every
PhP1,000 or fraction
thereof, in excess of
the first PhP2,000
per year

22. Mortgages, pledges, and deeds of trust

(Sec. 195)
a. Php5,000 or less PhP20.00
b. On each Php5,000 or fraction PhP10.00

thereof in excess of Php5,000
23. Deeds of sale and conveyances of real

property (Sec. 196)
a. Consideration is PhP1,000 or less PhP15.00
b. On each PhP1,000 or fraction

thereof in excess of PhP1,000 PhP15.00
24. Charter parties and similar instruments

(Sec. 197)
a. Registered gross tonnage of vessel PhP500 and additional

does not exceed 1,000 tons and PhP50/month in
duration of charter does not exceed 6 excess of 6 months
months
b. Registered gross tonnage of vessel PhP1,000 and additional

exceeds 1,000 tons but not over PhP100/month in
does not exceed 6 months excess of 6 months
c. Registered gross tonnage of vessel PhP1,500 and additional

exceeds 10,000 tons and duration of PhP150/month in
charter does not exceed 6 months excess of 6 months
25. Assignments and renewals of certain x Same rate as that of the

instruments (Sec. 198) original instruments

The following instruments, documents and papers shall be exempt

from documentary stamp tax (Sec. 199):
1. Policies of insurance or annuities made or granted by a fraternal

or beneficiary society, order, association or cooperative company,
operated on the lodge system or local cooperation plan and
organized and conducted solely by the members thereof for the
exclusive benefit of each member and not for profit.
2. Certificates of oaths administered to any government official in

his official capacity or of acknowledgment by any government
official in the performance of his official duties, written appearance
in any court by any government official, in his official capacity;
certificates of the administration of oaths to any person as to the
authenticity of any paper required to be filed in court by any
person or party thereto, whether the proceedings be civil or
criminal; papers and documents filed in courts by or for the
national, provincial, city or municipal governments; affidavits of
poor persons for the purpose of proving poverty; statements and
other compulsory information required of persons or corporations
by the rules and regulations of the national, provincial, city or
municipal governments exclusively for statistical purposes and
which are wholly for the use of the bureau or office in which they
are filed, and not at the instance or for the use or benefit of the
person filing them; certified copies and other certificates placed
upon documents, instruments and papers for the national,
provincial, city or municipal governments, made at the instance
and for the sole use of some other branch of the national, provincial,
city or municipal governments; and certificates of the assessed
value of lands, not exceeding Two hundred pesos (PhP200) in
value assessed, furnished by the provincial, city or municipal
Treasurer to applicants for registration of title to land.
3. Borrowing and lending of securities executed under the Securities

Borrowing and Lending Program of a registered exchange, or in
accordance with regulations prescribed by the appropriate
regulatory authority: Provided, however, that any borrowing or
lending of securities agreement as contemplated hereof shall be

duly covered by a master securities borrowing and lending

agreement acceptable to the appropriate regulatory authority, and
which agreement is duly registered and approved by the Bureau of
Internal Revenue (BIR).
4. Loan agreements or promissory notes, the aggregate of which does

not exceed Two hundred fifty thousand pesos (PhP250,000), or
any such amount as may be determined by the Secretary of Finance,
executed by an individual for his purchase on installment for his
personal use or that of his family and not for business or resale,
barter or hire of a house, lot, motor vehicle, appliance or furniture:
Provided, however, that the amount to be set by the Secretary of
Finance shall be in accordance with a relevant price index but not
to exceed ten percent (10%) of the current amount and shall remain
in force at least for three (3) years.
5. Sale, barter or exchange of shares of stock listed and traded through

the local stock exchange.315
6. Assignment or transfer of any mortgage, lease or policy of insurance,

or the renewal or continuance of any agreement, contract, charter,
or any evidence of obligation or indebtedness, if there is no change
in the maturity date or remaining period of coverage from that of
the original instrument.
7. Fixed income and other securities traded in the secondary market

or through an exchange.
8. Derivatives; Provided, that for purposes of this exemption,

repurchase agreements and reverse repurchase agreements shall
be treated similarly as derivatives.
9. Interbranch or interdepartmental advances within the same legal

entity.
315
Under RA 9243, the exemption was effective for only five years (March 20,
2004 – March 20, 2009) and RA 9648 made the exemption permanent.

10. All forebearances arising from sales or service contracts including

credit card and trade receivables; Provided, that the exemption be
limited to those executed by the seller or service provider itself.
11. Bank deposit accounts without a fixed term or maturity.
12. All contracts, deeds, documents and transactions related to the

conduct of business of the Bangko Sentral ng Pilipinas.
13. Transfer of property pursuant to Section 40(C)(2) of the National

Internal Revenue Code of 1997, as amended.
14. Interbank call loans with maturity of not more than seven (7) days
to cover deficiency in reserves against deposit liabilities, including
those between or among banks and quasi-banks.
15. Remittances of all overseas Filipino workers (OFWs), upon showing

of the same proof of entitlement by the OFW’s beneficiary or
recipient.316
316
RA 10022, “An Act Amending RA 8042, Otherwise Known as the Migrant
Workers and Overseas Filipinos Act of 1995, as Amended, Further Improving the Stan-
dard of Protection and Promotion of the Welfare of Migrant Workers, Their Families
and Overseas Filipinos in Distress, and for Other Purposes”, approved on March 8,
2010.

0F llllEfiiin r. t'i fivEi'rtln
BUREAU
REPUBLTc' bp rur I)HTLTPPTNES
RDCORDS MGI. ll\L51t-)l{
DE,PA}{TMENT OF FINANCI,
/0:40 A.M.
BUREAU OF INTERNAI RE\'ENUE
JAN t 5 20i8/,
Quezon City
RECE T,W}
Decernber l9^ 2017
RE'ENUB REGULATT,NS No. .4' A o l 8
SUB.IECT: Rules and Regulations Implementing the Documentary Stamp Tax Rate
Adjustment Under Republic Act No. 10963, otherwise Known as the
o'Tax Reform For
Acceleration and Inclusion (TRAIN) Laly,,
TO AII Revenue Olficials, Employees and Others Concernecl
SECTION 1. SCOPE. - PursLtant to the provisions in Section 4 and Sectiot't 244 of

Republic Act No. 8424 and Section 84 of Republic Act No. 10963. these regulatiorrs are
hereby prornulgated to implelrent the rate adjustrnent of docurnentary starnp taxes provicied
in Sections 51.52. 53.54,55,56.57,58,59,60, 61.62,63.64.65,6,6.6i.6g.69, ancl 70 in
Reptrblic Act No. 10963 otherwise known as the "Tax Reform fbr Acceleratic'rns and
Inclusion (TRAIN) Law".
SEC. 2. NEW RATE OF DST ON ORIGINAL ISSUE OF SHARES OF

STOCKS. -
"SEC. 174. Stuntp Tax on Original Issue of Slrures of Stctck On every origipal
-
issue. whetlrer ott organization. reorganization ol for any lawfirl pLrrpose. oisSar.is of
stock by any associatiotr. cotnpany. or coryoration. there shali be collectecl a
docttrnetltary statnp tax of two pesos (P2.00) on each Trvo hunclred pesos (p200). or
fi'actional part theleof. o1'tlte par value, of such shares of stock: Provideci. That in the
case of the original issue ol shares of stock without par value. the arrourrt of tle
doctttnentary statnp tax herein prescribed shall be basecl upon the actLral consideration
fbr the issuallce ol sttch shares of stock: Provided. further. that irr the case of stock
dividends. on the actual valr-re repr.esented by each sltar.e.,'
The rate of DST ott the original issue of shares has beerr increased fi-om One peso
(P1.00) to Two pesos (P2.00) on each Two hundred pesos (P200), or fractional part
thereof,
o1'the par value of such shares of stock.
SEC. 3. NEW RATE OF DST ON STAMP TAX ON SALES, AGREEMENTS

TO SELL, MEMORANDA OF SALES, DELIVERIES OR TRANSFER OF SHARES
OR CERTIFICATES OF STOCK. -
"SEC' 175..\tamp Tax on Sules, Agreetltents tc) Sell, Mentorcrnclu ctf'Salcs, Delit,er.ias
or Transfet'of Shares or Cet'tificate.s o.f Stock. - On all sales. or agreernelts to sell. or
lnetloranda ol sales. or deliveries ot'lranslel of sLrch securilies bv assignrneitt in
blank. or bv delivert'. or by any paper or agreenrent. ol rrerrorapdLrm or otlrer
evidences oltrallsf'er or sale rvhether entitling tlre holder in an-r,mar,uter to the benefit
ol such stock. or to secure the lLrtirre pavlreltt of rnoncl.'. or 1br tlte lulure lransfbr. clf
\r
Revenue Regulation,s lVo. _
Page 2 of9
any stock. thele shall be collected a docrureutar)/ stamp tax of One peso and Fifty
centavos (P1.50) on each Trvo huirdred pesos (P200), or fractional part thereof. of tire
par value of such stock: Plovided. That only one tax shall be collected on each sale or'
transfer of stock fi'oln one pel'solr to another. regaldless of whether or uot a certificate
of stock or obligation is issr"red. indorsed. or delivered in pursLrance ol such sale or
tratrsfer: and Provided. lirrther. That in tlre case olstock rvithout par value the amor.rr.rt
of the documentary starnp tax herein prescribed shall be equivalent to Fifb,percent of
the documentary stamp tax paid upon the original issue of said stock."
The rate of DST on sales. agreernents to sell. rnernoranda of sales. deliveries or

transfer of shares or certificates of stocli has been increased fionr Seventy-five centavos
(P0.75) to One peso and fiftl,centavos (P1.50) on each Trvo hundred pesos (P200), or
fl'actional part thereof, of the par value of sLrch stook. ln case of stocks without par value, the
DST shall be equivalent to Fift1, percent (50%) of the DST paid upon the original issue of
said stock.
SEC. 4, NEW RATE OF DST ON CERTIFICATES OF PROFITS OR

INTEREST IN PROPERTY OR ACCUMULATIONS. -
"SEC. 177. Stamp Tax on Cerlificales of Profits ot' Inlere.yt in Pt'oper0t or
Accuttrulatiorrs. - On all cerlificates of profits. or any certificate or nternorandunt
showing iuterest in the ploperty or acclllnulations of auy association. collpalty or
corporatior.r, and or.r all tlansfers ol sLrch cefiificates 01' rremoranda. there shall be
collected a docurrentar),stamp tax of One peso (P1.00) on each Two hundred pesos,
or fi'actional parl thereof, of the face value of such certificates or rlernorandurn."
The rate of DST on the Cerlificates of Profits or Interest in Property or Accumulations

has been increased frorn Fifty centavos (P0.50) to One pesos (P1.00) on each Two hundred
pesos, or fractional parl thereof, of the face value of such certificates or rnemoraltdurn.
SEC. 5. NEW RATE OF DST ON BANK CHECKS, DRAFTS, CERTIFICATES

OF DEPOSIT NOT BEARING INTEREST, AND OTHER INSTRUMENTS. -
"SEC. 178. Stcntp Tax on Bunk Checks, Druft,s, Certificutes of Deposit nol Beuring
Interesl, and Olher Inslrtunents. - On eaclr bank clieck. drafi. ol certificate of deposit
not drarving interest. or order for the paylrent of any sunt of rnoltey drawn upon ot'
issLred by any bank. trust colnpany. or any person ol' pelsons. contpan ies or'
corporatiorts. at sight or on dernaud, tl-rere shall be collected a docurlentary stamp tax
of Tlrree pesos (P3.00)."
Tlre rate of DST on balrk checks, drafts, cerlificates of deposit not bearing interest,
attd other instruments has beerr increased fi"om One peso and Fifty centavos (P1.50) to Three
pesos (P3.00 t.
SEC. 6. NEW RATE OF DST ON ALL DEBT INSTRUMENTS. -

"SEC. 179. Stantp Tqx ctn All Debt Inslrumcnts. - On every original issLre of debt
iltstrutneltts. there shall be collected a doclln-)entar),stamp tax of One peso and Fifty
celltavos (P1.50) otr each Two ltundred pesos (P200.00). or lractional parl tl-rereofl of
the issue price of-attv such debt instrurnenls: Provided. that fol sLrch debl instrr:tlents
u'ith terms of less tharr one ( 1) year. the documer.ltarv stamll tax to be collected shall
Ll
EU8EAU OT INTERHAT REVM\'IIE
ILE€ORDS MGT. I}tl.$IoN
V,
t0:40 A.U,
JAN l5 20lS t+
/,,\r/w"a
/*t " ./i'
itr,ek,EvE,tr
Ret,enuc Regulatious l'{o. _
Page 3 of9
be of a ploportional aurollnt in accordance with tlie latio of its term in r-rLrnrbel of

days to three liundred sixty-five (365) days: Pt'ovidecl, /ut'ther. That only one
documentar'1, stan.rp tax shall be impclsed on either loan agleement. or prouiissory
notes issued to secure such loan.
xxx"
The rate o1-DSI- on all debt instruments is increased fl'orn One peso (P1.00) to One
peso and Fifty centavos (P1.50) on each Trvo hundred pesos (P200.00), or fi'actional part
thereof, of the issue price of anl,sLrch debt instrurnenls.
SEC. 7. NEW RATE ON ALL BILLS OF EXCHANGE OR DRAFTS. -

"SEC. 180.StantpTuxonAll l]illsof'ExchungeorDt'ct/is. -Onall billsofexchange
(between points within the Philippines) or drafls. there shall be collected a
documentar_v stalrp tax of Sixt1, centavos (P0.60) on each Two hLrndled pesos
(P200.00) or il'actional part thereof, of the fhce value of any sLrch bill of exchange or
draft."
The rate of DST on all bills of exchange or drafts has been increased frorn Thirtl,
centavos (P0.30) to Sixty centavos (P0.60) on each Two hundred pesos (P200.00) or
fractional part thereo{. of the face value of any sLrch bill of exchange or draft.
SEC. 8. NEW RATE OF DST UPON ACCEPTANCE OF BILLS OF

EXCHANGE AND OTHERS. _
"SEC. 181 . Stamp Tax Uport Acceptctnce o.f Bills of Exchcutge qncl Others. -... Upon
any acceptauce ol payment of an1, bill of exchange or order for the payrnent of
money purporling to be drawn in a foreign country bLrt payable in the Philippines,
there shall be collected a documentary stamp tax of Sixty cerrtavos (P0.60) on each
Two hundred pesos (P200) or fi'actional part thereof,^ of the face value of any such
bill of exchange. or order. ol the Philippine equivalent of such value. if expressed in
foreign currency."
The rate oIDST on aoceptance of bills of exchange and others all bills of exchange or
drafts has been increased 1r'orn Thirty centavos (P0.30) to Sixty centavos (P0.60) on eaclr
Two hundred pesos (P200.00) or fractional part tlrereof, of the I'ace value of arry such bill of
exchange or draft, or the Philippine equivalent of such value, if expressed in foreign
currency.
SEC. 9. NEW RATE OF DST ON FOREIGN BILLS OF EXCHANGE AND

LETTERS OF CREDIT. -
"SEC. 182. Slcnry Tu.r on F()t'L'ign Bills of Erchunge and Letlers of Credit. - On all
foreign bills of exchange and letter of creclit (inclLrding orders. by telegraph or
othet'wise, for the paytnent of money issLrecl by express or steamship companies or by
any person or persons) drawn in bLrt pa1'able oLrt of the Philippines in a set of three
(3) or more according to the custom of merchants and bankers. tlrere shall be
collected a docurrentary stamp tax of Sixt.v centavos (P0.60) on each Two hundred
pesos (P200). or fi'actional part thereoL ofthe face vaiue ofan1' sucir bill ofexchange
\f/
V/
EUBE.AU OT TNTERNAL BIVEilITX
RECOrcS MCT. DTV$ION
lD:40 /4. 14,
'JAN
l5 20lE tt
l'fuilla't-
?-rYY!'*'41
.E:L&EYj: :,
Ret,enrte Regulotictrts No'
Page 4 of 9
-
orletterofcr.eclit.ortlrePhilippineeqLrivaletltofSLlChfacevalLre.ifexpresseditl
foreign cLtrrellcY '"
or drafts has been increased frorn Thirty
The rate of DST on all bills of exchatrge or fi'actional
(p0.60;;;.-u.r., rr"o h,*dred pesos (p200),
cerlravos (p0.30) 1o Sixty centavos or the Philippine
UiiL of exchange or letter of ct'eclit'
part tliereof, of tf',. f*. ualtte of any ,r"t-,
in foreign clrrl'enc\"
Iq,,,ir"i"", of sttch face value' ilexpressecl
SEC.I0.NEwRATEoFDSToNLIFEINSURANCEPOLICIES.-
.'SEC.183.Stont1lTuxonLi/blnsttt.ctttcePolicies'-orrirllpoliciesofit-lst'tt.atlceor
salle nla)r be called' wherebY atly it]sltratlce
other instrurnents by r,vhatevet'tlatlre the
shall be macle or reuer,vecl Llpo, auy
iii. lives.ilte'e shall be collected a oue-tiule
"t
rates:
clocutneutary stal.np tax at the followitlg
lf the atroittlt of it.lsltratlce cloes not exceed

PI 00'000 Exetlpt
lf the atlottttt of insurance exceeds

P20.00
P 100.000 birt does not exceed P300'000
lf the atttot"tttt of insr"trance exceeds

P50.00
P300.000 but cloes trot exceed P500'000
1f the anloitnt of insr:t'ance exceeds

P 100.00
P500.000 but does trot exceed P750'000
lf the amount of insurance exceeds

P 50'00
P750.000 br-rt does not exceecl P I '000'000 1
PI P200.00"
lf the amount of insttrance exceeds '000'000
Tlreratesof'DSTontifeinsurancepolicieslravebeendotrbled.
SEC.II.NEwRATEoFDSToNPOLICIESoFANNUITIESANDPRE-
NEED PLANS. -
..sEC. I 86. Srantp Tax on Policies o.f AtTtttities
cutcl Pre-l'{eecl Plans' - on all policies
nanre the salne lnay be called'.whereby
of annuities. o, otl,,., instrurnents by whatever
atlantrrtitymaybemacle,transfe.,...lo.redeenled.tlrereshallbecollecteda
on each Trvo hundred p.'o'lPi99J-.1,
doculnentary Stalnp tax of otle peso {P1'00)
itlstallmellt paylnent ol-l cotltract prlce
fractioral part iirJ'eof of tlte prel.uir-tm or
statrp tax shall be Forty cetrtavos
collected. o', ;;;-;;;; plunr. i1',e cloc,-rr.,',e,rtary part thereof. of the premiutn
(p0.40) o,., .o.h'Trro hunclrecl pesos IpZOO;. or fi'actional
or contribLttion collectecl"'
TlrerateofDSTonannuitieslrasbeenincreaseclfl"omFiftycelltavos(P0.50)toone or
peso (p1.00) on
p.ror lRZOtt), or fi'actional partthereof. of the pretnium
"u"hi*o.tr,,,,.,ar.a
instalhnent payment on contract pr'tt
tJl"ti:O ry::::l"t'ir;1 are now taxed at Fortl'
rate of
'frvenlY centavos (P0'20)
centavos (P0.40) fiorn the previotts
[,I}R,OAU OF INIIRNAT REVENI,E

idCOMS MGT. DTYTSION
to :40 A. t4,
JAN 15 20
" t#oo^
R.ECEI Y,fi'g
Ravenue Regulolions lt'lo. _
Page 5 of9
SEC. 12. NEW RATB OF DST ON CERTIFICATES. -

"SEC. 188. Slnrp Tax on ('ertificutes. - On each cerlificate of damage ot'otherrvise.
and on every other certificate or clocrurent issued b1, any cLlstorrs officer'^ mat'ine
sllrveyor. ol other pelson acting as sr-rch. and on eacli certificate issLrecl by a notar),
pLrblic, and on each celtificate o1'arry description reqLrired by lau, or by rules or
regulations o1' a public office. or which is lssLred for the purpose of giving
infbrrration. or establishing proolof a fact. and not otherwise specified herein. there
shall be collected a docurrentary stan.lp tax of Thirty pesos (P30.00)."
The rate of DST on cefiificates has been increased fi'oni Fifteen pesos (P15.00) to
Thirtl, pesos (P30.00).
SEC. 13. NEW RATE OF DST ON WAREHOUSE RECEIPTS. -

"SEC. it89. Stantp l"qx on trl/at'ehctusa Receipls. - On each warehouse leceipt for
propefiy held in storage in a pLrblic or private r,varehouse or yard fbr any person othet'
than the proprietor of such warehoLrse or yald. there shall be collected a documentary
starnp tax of Thirty pesos (P30.00): Provided, Thqt tro tax shall be collected on each
r,varehouse receipt issLred to any one person in any one calendar n.ronth coverill,,
properly the value of rvhich does uot exceed Tr.vo hundred pesos (P200)."
The rate of DST ori warehouse receipts has been increased fi'orn Fifteen pesos
(P I 5.00) to Thirty pesos (P30.00).
sEC. 14. NEW RATE OF DST ON JAI-ALAI, HORSE RACE, TICKETS,

LOTTO, OR OTHER AUTHORIZED NUMBERS GAMES. -
"SEC. 190. Stantp Tax ou ,Jai-alai, Horse Race, Tickets. Lotto, ot' Olher Aulhorized
Ntunbers Gantes. - On each jai-alai, horse race ticket, lotto. ot' othet' authorized
nuurbers garres. there shall be collected a documentary stamp tax of Twenty centavos
(P0.20): Provicled, Thqt if the cost of the ticket exceed Or"re peso (P1.00), an
additional tax of Twenty centavos (P0.20) ou every One peso (P1.00), or fi'actional
parl thereof, shall be collected."
The rate of DST orr .iai-alai. horse race. tickets, lotto, or other aLrthorized number
game has been increased fi'orr Ten centavos (P0.10) to Trventy centavos (P0.20); and if the
cost of ticket exceeds One peso (P1.00), the additional tax has bee:r increased fl'orn Ten
centavos (P0.10) to Tr,venty centavos (P0.20) on every One peso (P1.00). or fractional parl
thereof.
SEC. 15. NEW RATE OF DST ON BILLS OF LADING OR RECEIPTS -

"SEC. lgl. stcuttlt Tctx cn Bills o/"Lading ot' Receipts. - On each set of bills of lading
or receipts (except charlel parly)for any goods. rnerchandise, or effects shipped fi'orn
one porl or place in the Philippines (except on lerries across rivers). or to any foreign
poft. there shall be collected a documentary stamp tax of Two pesos (P2,00). if the
value ofsuch goods exceeds One hurrdled pesos (P100) and does not exceed One
thousand pesos (P1.000); Twenty pesos (P20.00). if the value exceeds One thousand
pesos (P1 .00A): Prot,idecl, hott'ever, That fi'eight tickets covering goods. tnerchandise
F,LrllEAU 0l l}mnilAl !t[W,t{-tlD W,

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Page 6 of9
or effects carlied as accolrpaniecl baggage of passengels on land and vvatet' cat'riers

prinrarily engaged in the tlansportatiott of passettgers are het'eb1' exempt."
The rate o1'DST on each bill of lading or receipl has been increased from Olre peso
(P1.00) to Two pesos (P2.00). if the value of goods exceeds One liundred pesos (P100) and
does not exceed One thousand pesos (P1.000): arrd the rate of DST has beett increased il'orn
T'en pesos (P10.00) to Twentl,pesos (P20.00). if the value of goods exceeds One thousand
pesos (P 1,000).
SEC. 16. NEW RATE OF DST ON PROXIES. -

"SEC. 192. Stamp Tux on Proxies. - On each proxy lol voting at any election of
olficers of any colrpany ol association. Or lbr any other plrrpose. except proxies
issued affecting the affairs of associations or corpol'ations ot'ganized fbl religioLrs,
charitable. or literarl,purposes. there shall be collected a docurnentary starnp tax of
Thirty pesos (P30.00)."
The rate of DST on each proxy has been increased frorn Fifieen pesos (Pl5.00) to
Thirty pesos (P30.00).
SEC. 17. NEW RATE OF DST ON POWERS OF ATTORNEY. -

"SEC. 193. Stamp Tax on Powers of'Attorne.1t. - On each power of attorney to
perform any act whatsoever', except acts conuected witlr the collection of claims due
f}om or accruing to the Govemrrellt of the RepLrblic of the Philippines, or the
govelrlxent of any province, city or rnunicipality, there shall be collected a
documentary stamp tax of Ten pesos (P 10.00)."
The rate of DST on each power of attorney has been increased frorn Five pesos
(P5.00) to Ten pesos (P I 0.00).
SEC. 18. NEW RATE OF DST ON LEASES AND OTHER HIRTNG

AGREBMENTS. -
"SEC. 194. Stuntp Tar on Leases ctncl Olltcr Hiring tlgreentcnls. - On eaclt lease.
agreetnelrt. rnernolandum. or contracl for hire, Llse or rent of an1, lands or teneurents.
or portions theleof. tltere shall be collected a docuurentaly stamp tax of Six pesos
(P6.00) fbr the fir'st Two thousand pesos (P2.000). or fi'actional part theleof, and arr
additional Two pesos (P2.00) for every One tlrousand pesos (P1.000) or fractiottal
parl thereof. in excess of the first Two thousand pesos (P2,000) lor each year of the
term of said contract or agreetnetrt."
The rate of DST on leases and other hiring agreelxents has been increasecl fi'om Three
pesos (P3.00) to Six pesos (P6.00.; for:the first Trvo thousancl pesos (P2,000). or fractional
part thereoft and tlie additional tax r,vas increased frorn One peso (PL00) to Two pesos
(P2.00) for every One thousand pesos (P1,000) or fi'actional part thereof, in excess of the first
Two tlrousand pesos (P2,000).
SEC. 19. NEW RATE OF DST ON MORTGAGES, PLEDGES, AND DEEDS

OF TRUST -
EUBNAU OF II{TERNAL REYts{UE
M.
V ITE€ORI}S MGT, DrYISION
tD:40 A. fu,
JAN l5 20lE /1
!,ur,*
I} E' C E TY T'iT
aB, aj
Revenue Regulalicuts No. _
Page 7 of9
"SECTION'195. Slatnp Tar on lvfortgcrges, Pleclges, und Dceds o/'Tt'usl. - Ou every

ntortgage or pledge of lands. estate, or propefiy. real or personal, helitable or
rnovable. whatsoever'. vvhere the same shall be made as a secr-rlity for the paynrent o{'
any definite ancl certain sr.rnr of nroney lent at the time ol previously due and owirtg
or lolbolne to be paid. being payable. and on auy conveyance of land, estate. or'
property rvliatsoever'. in tnrst or to be sold, or otheln,ise cclnverted into inoney rvlrich
shall be and intended only as seculity. either by express stipulation or otherwise.
there shall collected a docurnentary starnp tax at the fbllowing rales:
(a) When the arroLrnt seculed does not exceed Five thousand pesos (P5.000).
Forly pesos (P40.00).
(b) On each Five thousand pesos (P5.000). or fiactional part thereof in excess
o1'Five thousand pesos (P5.000). an additional tax of Trventy pesos P20.00.
xxx"
The rate of DST on every mortgage, pledge, or deed of trLrst has been increased fl'orn
Twenty pesos (P20.00) to Forty pesos (P40.00), rvhen arrount secured does trot exceed Five
thousand pesos (P5,000); and the additional tax has been increased from Ten pesos (P10.00)
to Twenty pesos (P20.00), on each Five thousand pesos (P5.000). or fractional parl thereof in
excess of Five thousand pesos (P5,000).
SEC. 20. NEW RATE OF DST ON DEEDS OF SALE. AND CONVEYANCES

AND DONATION OF REAL PROPERTY. -
"SEC. 196. Stamp lox on Deeds of' Sole, Convqtcmces qnd Datqtions o/' Real
Properqt. - On a[1 col.]veyances. donatior.rs, deeds. instrurnents, or rvritings. other than
grants, patents or original cefiificates of adjudication issued by tlie government.
whereby any land, tellernent, or other realty sold shall be grauted. assigned.
transferled. donated ol otherwise conveyed to the purchaser^ or purchasers, or to arry
other person ol persons designated by sLrch purchaser or purchasers, or donee. there
shall be collected a docurnentary stamp tax. at tlie rates herein below prescribed.
based on the consideration contracted to be paid for such lealty or on its fair nrarket
value detenlrined in accordance r,vith Sectiorr 6(E) of this Code, whiclrever is higher:
Provided. That wlien one olthe contractine parlies is the Covernurent the tax lrereirr
imposed shall be based on the actual consideration.
(a) When the consideration, or" value received or contracted to be paid for sLrch
realty. afiel rnakrng proper allowarrce ol auy encurrbrance. does not exceed One
thousand pesos (P I ,000). Fifteen pesos (P I 5.00).
(b) For each additional One thousand pesos (P1.000) or fi'actional part thereof in
excess of Otte thousatid pesos (P1.000) of such consideration ol value, Fifteen
pesos (P 15.00)).
Transfers exerxpt from donor's tax under Section 101 (a) ancl (b) of this Cocle shall
be exempt fi'orn the tax imposed Lrnder this section.
When it appears that the arnoLlnt olthe docurnentar)'starnp tax payable lrereunder has
been reduced b.y an irrcot'r'ect staternent olthe consideralion in an1, conveyance. deed.
instrurrent or rvriting sr-rbject to such tax the Cornmissioner. provincial or city
TreasLrrer'. or other revel.]ue officer slrali. fi'om the assessrrent rolls ol other reliable
0l f\ryER\lAL BEl,mflIE
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" ITECORO$ frTGT. DIVISIGN
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JAN 15 208
il_l_no
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Reventre Regulalions Nn. _
Page 8 ol9
sollrce of inforrnatiou. assess the properly ol' its true nrarket value and collect the
proper tax thereort."
Donations of real property slrall rrorry be subject to DST r.rnder the amelrded Section
196. Horvever. the fbllowing donations or gifts exempt Il'onr donor's titx ulrderSection l0l
(A) and (B) shall be exernpt fi'om DST:
(A) In the Casa oJ Gi/is t\ludc b), tt Rc,vident
(l)Gifts made to or for the use of the National Covernrnent or anv errtitv created bt
any of its agencies whioh is not conducted fbr profit. or to anv political sLrbdivision o1'
the said Governrnent: and
(2) Gifts iu favor o[' an educational and/or charitable, religious. cultural or social
welfare corporation. institirtiorr. accredited nongovernlnent organizatiotl. trLlst or
philanthropic organization or research institution clr organization: Provided, however,
That not more than thirty percent (30%) of said gifts shall be used by such donee for
adrninistration purposes. For the pLrrpose of this exemption, a 'non-profit edircational
and/or charitable corporation. institLrtion, accredited nongovernl-r'lent organizatiorr.
trust or philanthropic organization and/or research institLrtion or organization' is a
school, college or universitl, and/or charitable corporatior-r, accredited nongovernment
organization, trust or philanthropic organizatiorr and/or research institution or
organizatiorr. incorporated as a non-stocli entity, paying rro dividends, governed by
trustees who receive no cornpensation, and devoting all its irrcorne, whether students'
fees or gifts, donation, subsidies or other forms of philanthropy, to tlre
accornplishment and promotion of the purposes enumerated irr its Articles of
Incorporation.
(B) In the Co.ye qf Gi.fts Made by u Nonre.yident nol a Citizen o./'the Philipltine,s
(l) Gifts rnade to or lor the use of the National Government or any errtity created b1,
any of its agencies rvhich is not conducted for profit, or to any political subdivision of
tlre said Governrnent.
(2) Gifts in favor of an educational and/or charitable. religious, cultural or social

welfare corporation, institution, foundation. trust or philanthropic organization or
research irrstitution or organization'. Prot,idad, howet,er, That not rnore than thirty
percent (30%) of said gifts shall be Lrsed by sLrch donee for adrninistration purposes.
SEC. 21. NEW RATE OF DST ON CHARTER PARTIES AND SIMILAR

INSTRUMENTS.,
"SEC. 197. Stutrtp TtL\ ttn ('lrr,,'itr','Purlie.s cutcl Sintilcrr In.stt'untet'tts. - On evely
chafter par1y. contract or agreelrent Jbr tlie charler of any ship. vessel or stl'earner, or
any letter or mernolartdum or other writing between the captairr. rnaster or owner'. or
otlrel person acting as agent of any ship. vessel or stearxer. and an.v othel pelson or
persons lbr or relatirrg to the cirafter of any such ship. vessel or streamer. and on any
rener.val or tt'ansfer of such charter. contract. agreenrent. letter ol rnernorandurn. there
shall be collected a clocunrentar)'stamp tax at the follovving rates:
({
ElIfiEAU OT INTEBNAI,
RECORDS MGT. DTVISION
BE|VTNITE \f
/D:4D A. 14,
JAN I lUI6
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Revenue Regulatiotls Nn. _
Page 9 of9
(a) lf the registered gross tonnage ol the ship, vessel or stearner does not exceed
one thousand (1.000) tons. and the duration ofthe charter or coutl'act doesnot
exceed six (6) months, One thousand pesos (P1.000); and for each month or
fiaction of a uronth in excess of six (6) months. an additional tax of One hundred
pesos (P I 00.00) shall be paid.
(b) Ifthelegisteredgrosstonnageexceedsorrethousand(1.000)tonsandcloesnot
exceed ten thousand ( I 0.000) tons. and the dLrratiorr of tlre chartel or contract does
not exceed six (6) rnonths. Tlvo thor-rsand pesos (P2,000); arrd fbr each rronth ol'
fraction ola nronth in excess of six (6) months. an additional tax of Tr,vo hundted
pesos (P200.00) shall be paid.
(c) lf the registeled gloss tonnage exceeds ten thousand ( 1 0.000) tons and the
duration ofthe charter or contract does not exceed six (6) nionths. Tirlee thousand
pesos (P3,000); and lor each rnonth or fraction of a rronth in excess of six (6)
months. an additional tax of Three hundrecl pesos (P300.00) shall be paid."
The rates of DST on charter parties aud similar instruments have beeu doubled.
SEC.22. REPEALING CLAUSE. -All existing rules and regulations or parls thereol,
which are inconsistent with the provisions of these regulations, are herebv repealed, amended
or modified accordingly.
SEC. 23. SEPARABILITY CLAUSE. - If any clause, serlterlce, provision or section

of these Rules shall be held invalid or unconstitutional, the rernaining parts thereof shall notbe
affected thereby.
SEC. 24. EFFECTMTY. - These regr.rlations shall take effecl after fifteen ( I 5) davs
following pLrblication in the Official Gazette or a newspaper of general circulation, rvhichever
cornes first.
CARLOS G. DOI\fi}T JEZ

Secretary ofFinance
iAil 1 1 2018
Recommend i ng Approval :
B*IE!4U- gF INTERNAL BF.I,U{IJE
ITECORDS McT. UfytStOn
-/ Itr^ây*'v
CAESAR DULAY
R.
/o:4o I
. 14,
JAN 15 20tE /+
Commissioner of Internal Revenue
' 012459
RECE \ffi
BIR IRwRR Draliing ancl Inrltlenrentation Corrntittee
Chapter V
EXCISE TAXES243
A. GENERAL PROVISIONS
1. The excise tax based on weight, volume capacity or any other physical
unit of measurement is referred to as “specific tax”; if based on selling
price or other specified value is referred to as “ad valorem” tax. The
excise tax shall be in addition to VAT.244
2. The gross selling price of goods subject to ad valorem tax is the price,
excluding VAT, at which the goods are sold at wholesale in the place of
production or through their sales agent to the public.245
3. Excise tax on domestic goods shall be paid by the manufacturer or

producer thereof before the removal of such goods from the place of
production, except on indigenous petroleum, locally extracted natural
gas and liquefied natural gas which shall be paid by the first buyer,
purchaser or transferee for local sale, barter or transfer, while the excise
tax on exported products shall be paid by the owner, lessee,
concessionaire
EO 22 or operator of the mining claim.246
243
Title VI, NIRC, as amended by RAs 8240, 9224, 9334, 9337 and 10351.
244
Sec. 129, supra.
245
Sec. 130, supra.
246
Sec. 130, supra.

Chapter V Excise Taxes
4. Should domestic products be removed from the place of production

without the payment of the tax, the owner or person having possession
thereof shall be liable for the tax due thereon.247
5. Every person liable to pay excise tax shall file a separate return for
each place of production setting forth, among others, the description
and quantity or volume of products to be removed, the applicable
tax base and the amount of tax due thereon. The return may be filed
with, and the tax may be paid to, any authorized agent bank or
Revenue Collection Officer, or duly authorized City or Municipal
Treasurer in the Philippines.
6. Any excise tax paid on domestic products actually exported in their

original state or as ingredients or parts of any manufactured goods is
allowed to be credited or refunded upon submission of proof of actual
exportation and upon receipt of the corresponding foreign exchange
payment. However, the excise tax on mineral products, except coal
and coke, is not allowed to be credited or refunded even if the mineral
products are actually exported.248
7. Manufacturers or producers of articles subject to excise taxes are

required to file with the BIR Commissioner a sworn statement
showing, among other information, the different goods or products
manufactured or produced and their corresponding gross selling price
or market value, together with the cost of manufacture or production
plus expenses incurred or to be incurred until the goods or products
are finally sold.249
247
Sec. 130(A)(1), supra. It is noted that possessors of metallic minerals must be
able to show proof that the excise tax has been paid thereon, otherwise, they shall be
assessed and be held liable for the payment thereof. Metallic minerals discovered in the
possession of persons who cannot show proof of payment of excise taxes thereon are
presumed to have been removed on the day of discovery.
248
Ibid.
249
Sec. 130(c), supra. Refer to Sec. 7 of RR 17-2012 for the information needed in
the submission of sworn statement of manufacturer or importer of alcohol and tobacco
products.

8. On the other hand, excise tax on imported articles shall be paid by

the owner or importer to the Customs Officers, conformably with
the regulations of the Department of Finance and before the release
of such articles from the customshouse, or by the person who is
found in possession of articles which are exempt from excise taxes
other than those legally entitled to exemption.250
9. In the case of tax-free articles brought or imported into the Philippines

by persons, entities, or agencies exempt from tax which are
subsequently sold, transferred or exchanged in the Philippines to non-
exempt persons or entities, the purchasers or recipients shall be
considered the importers thereof, and shall be liable for the duty and
internal revenue tax due on such importation.251
10. Notwithstanding the provisions of RAs 9400 and 9593, importations

of cigars and cigarettes, distilled spirits, fermented liquors and wines
made directly by a government-owned and operated duty-free shop,
like the Duty-Free Philippines (DFP), shall be exempted from all
applicable duties only.252
11. All importations and removals from place of production of cigarettes

shall be affixed with the internal revenue stamps prescribed under RR
7-2014, as amended by RR 9-2015. Likewise, all concerned importers
and local manufacturers of cigarettes shall enroll with the Internal
Revenue Stamp Integrated System (IRSIS) for the ordering, distribution
and monitoring thereof.253
12. As an additional export and import requirements for tobacco

products, no tobacco products manufactured in the Philippines and
produced for export shall be removed from their place of manufacture
or exported without posting of an export bond equivalent to the
amount of the excise tax due thereon if sold domestically; provided,
however, that tobacco products for export may be transferred from
250
Sec. 131, supra.
251
Ibid.
252
Sec. 12, RR 3-2006.
253
Sec. 9 and 13, RR 7-2014, as amended by RR 9-2015.

the place of manufacture to a bonded facility, upon posting of a

transfer bond, prior to export.254
13. Likewise, tobacco products imported into the Philippines and destined
for foreign countries shall not be allowed entry without posting a
bond equivalent to the amount of customs duty, excise and value-
added taxes due thereon if sold domestically.255
14. The following articles shall be exempt from the excise tax:256
a. Partially manufactured leaf tobacco and leaf tobacco wastes,

provided, that the same are to be directly exported by the owner
thereof or to be used by the transferee or buyer as raw materials
in the manufacture of cigars, cigarettes or other exciseable tobacco
products on which the excise tax will eventually be paid on the
finished product.257
b. Sale or importation258 of an alcohol or tobacco product to/by

international airline/vessel in case there is a provision under their
charter or international treaties or agreements which the
Philippines is a signatory that exempts international airlines/vessels
from excise tax on alcohol or tobacco products.259
254
Sec. 10, RR 17-2012
255
Ibid.
256
The BIR issued RR 3-2008 with regard to the granting of outright excise tax
exemption on removals of exciseable articles intended for export or sale/delivery to
international carriers or to tax-exempt entities/agencies and prescribing the provisions
for availing of claims for product replenishment.
257
Sec. 11, RR 3-2006.
258
Importation shall refer to the introduction of an alcohol or tobacco product
from a foreign country into the Philippine custom’s territory or into a duly chartered
economic and freeport zones and duty-free shops, whether for sale or not. Any
alcohol or tobacco product entering the Philippines through the freeport and special
economic zones shall be deemed to have entered the Philippine customs’ territory
upon unloading thereof from the carrying vessel. [Sec. 2(n), RR 3-2006]
259
Sec. 13, RR 3-2006.

c. Removal of ethyl alcohol from distilleries for purposes other than

the manufacture of compounded liquors260 such as for use as
blending component for gasoline under RA 9367, otherwise known
as the “Biofuel Act of 2006”, or for industrial and pharmaceutical
purposes.261
d. Distilled spirits such as, but not limited to, ethyl alcohol, removed
from the place of production for purposes of rectification by another
establishment.262
e. Locally extracted natural gas and liquefied natural gas263
f. Petroleum products sold to:264
(1) International carriers of Philippine or foreign registry on their

use or consumption outside the Philippines.265
260
“Compounded liquors” shall refer to intoxicating beverages whatever
concocted by or resulting from mixture of or addition to distilled spirits, either before or
after rectification, of any coloring matter, flavoring extract or essence or other kind of
wine, liquor or other ingredients. [Sec. 2(d), RR 17-2012]
261
RMC 18-2013.
262
The removal of ethyl alcohol or ethanol from distilleries for purposes of
rectification shall be conditionally tax-exempt and the excise tax due on the rectified
alcohol shall be paid by the rectifier pursuant to the provisions of Sec. 137 of the NIRC
of 1997, as amended and implementing rules and regulations thereof. In case the rectifier
shall remove and deliver the rectified alcohol to manufacturers of compounded liquors,
such removal shall not be subject to excise tax provided that a surety bond in an amount
similar to that provided above for distilleries shall have been posted by the rectifier.
(RMC 18-2013)
On the other hand, the term rectification shall refer to the process of refining,
purifying or enhancing the quality of ethyl alcohol only by distillation. (Sec. 14, RR 3-2006)
263
Sec. 151(A)(2), supra, as amended by RA 9337.
264
Sec. 135, supra.
265
Provided, that the petroleum products sold to these international carriers
shall be stored in a bondage storage tank and may be disposed of only in accordance
with the rules and regulations to be prescribed by the Secretary of Finance, upon
recommendation of the Commissioner. [Sec. 135(a), supra]

(2) Exempt entities or agencies covered by tax treaties,

conventions and other international agreements for their use
or consumption.266
(3) Entities which are by law exempt from direct and indirect
taxes.
g. Removals of locally manufactured/assembled or release of

imported automobiles from the place of production or from
customs’ custody subject to the following conditions:267
(1) On locally manufactured/assembled automobiles which shall

be removed for exportation and are actually exported
without returning to the Philippines;268
(2) Sale of manufacturers/assemblers or importers of automobiles

to tax-exempt persons or entities, and removals of imported
automobiles from customs’ custody by tax-exempt persons
or entities subject to existing rules and regulations;269
(3) Automobiles imported directly into the legislated Freeport

zones from abroad or purchased from establishments located
within the customs territory for use exclusively within the
Freeport zone; and
266
Provided, however, that the country of said foreign international carrier or
exempt entities or agencies exempts from similar taxes petroleum products sold to
Philippine carriers, entities or agencies. [Sec. 135(b), supra]
267
Sec. 9, RR 25-2003.
268
This is subject to the following conditions: (i) application of a permit to export
immediately before removal; (ii) direct delivery to vessel; (iii) submission of proof of
exportation; and (iv) payment of an exporter’s bond, when deemed necessary. [Sec.
9(a), RR 25-2003]
269
No automobiles shall be removed from the assembly plant or place of production
or release from customs custody for sale to tax-exempt agencies without prior written
approval from the Commissioner of Internal Revenue. [Sec. 9(b)(2), RR 25-2003]

(4) Removal of automobiles for test run. However, should an

automobile be removed for test run, prior notice of the
test run should be given to the appropriate BIR Office that
may allow the test run; provided, that the unit under the
test run shall be returned to the plant the same day. [Sec.
9(d), RR 25-2003]
h. Sale/delivery of exciseable articles to embassies, legates such

as the Office of the Papal Nuncio, or international organizations
(i.e. Asian Development Bank, International Rice Research
Institute, United Nations’ various international organizations
such as World Health Organization, UNICEF, etc.) subject to
certain conditions.
B. COMMODITIES SUBJECT TO EXCISE TAXES
The following exciseable articles are also subject to VAT, viz.
1. Alcohol Products
a. Distilled Spirits,270 per proof liter271
Tax Rates268
Effective Effective Effective Effective Effective
Article January January January January January 2018
1, 2013 1, 2014 1, 2015 1, 2016 1, 2017
Onwards
270
Sec. 141, supra. “Spirits or distilled spirits” is the substance known as
ethyl alcohol, ethanol or spirits of wine, including all dilutions, purifications 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.
271
A proof liter means a liter of proof spirits, which is liquor containing one-
half (½) of its volume of alcohol of a specific gravity of 0.7939 at 15°C. (Sec. 141,
supra)

Tax Rates272
Effective Effective Effective Effective Effective 2018
Article January January January January January Onwards
1, 2013 1, 2014 1, 2015 1, 2016 1, 2017
(1) Distilled spirits
(a) Ad valorem tax 15% 15% 20% 20% 20% 20%

Based on the net
retail price (NRP)273
per proof (excluding
the excise tax and
VAT)
(b) Specific tax PhP20.00 PhP20.00 PhP20.00 PhP20.80 PhP21.63 Effective

Per proof liter 01-01-16,
the specific
tax rate
shall be
increased
by 4%
every year
thereafter
(2) Medicinal Same tax

preparations, as chief ingredient
flavoring extracts, and
all other preparations,
except toilet
preparations, of which,
excluding water,
distilled spirits form
the chief ingredient
272
Sec. 3(A)(1), RR 17-2012.
273
The net retail price (NRP) shall be determined by the BIR through a price
survey under oath. It shall mean the price at which the distilled spirits is sold on retail
in at least five (5) major supermarkets in Metro Manila, excluding the amount intended to
cover the applicable excise tax and the VAT. For distilled spirits which are marketed
outside Metro Manila, the NRP shall mean the price at which the distilled spirits is sold
in at least five (5) major supermarkets in the region excluding the amount intended to
cover the applicable excise tax and the VAT. (Sec. 141, supra)

Distilled spirits introduced in the domestic market after the

effectivity of RA 10351 shall be initially taxed according to their
suggested NRPs274.
All distilled spirits existing in the market at the time of the

effectivity of RA 10351 shall be taxed according to the tax rates
provided above based on the latest price survey of the distilled
spirits conducted by the BIR.
b. Wines, per liter of volume capacity275
Tax Rates276
1, 2013 1, 2014 1, 2015 1, 2016 1, 2017
(1) Sparkling wines/

champagnes, 277
where the NRP
(excluding the excise
tax and VAT) per
bottle of 750ml
volume capacity,
regardless of proof is:
274
“Suggested net retail price (NRP)” shall mean the NRP at which the locally
manufactured or imported distilled spirits are intended by the manufacturer or importer
to be sold on retail in major supermarkets or retail outlets in Metro Manila for those
marketed nationwide, and in other regions, for those with regional markets. (Sec. 141,
supra)
275
Sec. 142, supra.
276
Sec. 3(A)(2), RR 17-2012.
277
“Sparkling wine or champagne” shall refer to an effervescent wine containing
more than 0.392 grams of carbon dioxide per 100 milliliters of wine resulting solely from
the secondary fermentation of the wine within a closed container. [Sec. 2(f), RR 17-
2012]

Tax Rates
1, 2013 1, 2014 1, 2015 1, 2016 1, 2017
Onwards
Php500.00 or less PhP250.00 PhP260.00 PhP270.40 PhP281.22 PhP292.47 Effective
More than 01-01-14,
Php500.00 PhP700.00 PhP728.00 PhP757.12 PhP787.40 PhP818.90 the
specific
tax rate
(2) Still wines278 and PhP30.00 PhP31.20 PhP32.45 PhP33.75 PhP35.10 shall be
carbonated wines 279 increased
containing 14% by 4%
of alcohol by every year
volume or less thereafter
(3) Still wines and PhP60.00 PhP62.40 PhP64.90 PhP67.50 PhP70.20

carbonated wines
containing more
than 14% of
alcohol by volume
but not more
25% of alcohol
by volume
(4) Fortified wines280 Taxed as distilled spirits

containing more
than 25% of
alcohol by volume
278
“Still wine” shall refer to wine containing not more than 0.392 of carbon
dioxide per 100 milliliters of wine. [Sec. 2(g), RR 17-2012]
279
“Carbonated wine” shall refer to an effervescent wine artificially charge with
carbon dioxide and containing more than 0.392 of carbon dioxide per 100 millimeters of
wine. [Sec. 2(b), RR 17-2012]
280
“Fortified wines” shall mean natural wines to which distilled spirits are added
to increase their alcohol strength. (Sec. 142, supra)

Sparkling wines/champagnes introduced in the domestic

market after the effectivity of RA 10351 shall be initially tax
classified according to their suggested NRPs281.
The proper tax classification of sparkling wines/

champagnes, whether registered before or after the effectivity of
RA 10351, shall be determined every two (2) years from the
date of effectivity of RA 10351.
All sparkling wines/champagnes existing in the market at

the time of the effectivity of RA 10351 shall be classified according
to the NRPs and the tax rates provided above based on the
latest price survey of the sparkling wine/champagnes conducted
by the BIR.
c. Fermented Liquor,282 per liter of volume capacity283
Tax Rates284
1, 2013 1, 2014 1, 2015 1, 2016 1, 2017
(1) If the NRP285

(excluding the
excise tax and VAT)
per liter of volume
capacity is:
281
Sec. 142, supra.
282
Shall include beer, lager beer, ale, porter, and other fermented liquors except,
tuba, basi, tapuy and similar fermented liquors.
283
Sec. 143, supra.
284
Sec. 3(A)(3), RR 17-2012.
285
Sec. 143, supra.

Tax Rates
1, 2013 1, 2014 1, 2015 1, 2016 1, 2017
Less than Php50.60 PhP15.00 PhP17.00 PhP19.00 PhP21.00 PhP23.50 Effective

01-01-18,
More than Php50.60 PhP20.00 PhP21.00 PhP22.00 PhP23.00 PhP23.50 the specific
tax rate
shall be
increased
by 4%
every year
thereafter
(2) If brewed and sold PhP28.00 PhP29.12 PhP30.28 PhP31.50 PhP32.76 Effective
at microbreweries or 01-01-14,
small establishments the specific
such as pubs and tax rate
restaurants, regardless shall be
of the NRP increased
by 4%
every year
thereafter
Any downward reclassification of present categories, for

tax purposes, of fermented liquors duly registered at the time of
the effectivity of RA 10351 which will reduce the tax imposed
herein, or the payment thereof, shall be prohibited. In this regard,
the provision for the four percent (4%) increase every year
thereafter effective January 1, 2018286 shall apply to their
respective applicable tax rates.
Fermented liquors introduced in the domestic market after

the effectivity of RA 10351 shall be initially tax classified according
to their suggested NRPs287.
286
It is noted, however, that under Sec. 5 of RR 17-2012, the applicable tax rate
for fermented liquors that are affected by the no downward classification provision
shall be increased by 4% annually starting January 1, 2014.
287
Sec. 142, supra.

The proper tax classification of fermented liquors, whether

registered before or after the effectivity of RA 10351, shall be
determined every two (2) years from the date of the effectivity of
RA 10351.
All fermented liquors existing in the market at the time of

the effectivity of RA 10351 shall be classified according to the
NRPs and the tax rates provided above based on the latest price
survey of the fermented liquors conducted by the BIR.
2. Tobacco Products
a. Tobacco products, per kilogram288
Tax Rates289
1, 2013 1, 2014 1, 2015 1, 2016 1, 2017
(1) Tobacco twisted by PhP1.75 PhP1.82 PhP1.89 PhP1.97 PhP2.05 Effective

hand or reduced into 01-01-14,
a condition to be the specific
consumed in any tax rate
manner other than shall be
the ordinary mode of increased
drying and curing by 4%
every year
thereafter
(2) Tobacco prepared PhP1.75 PhP1.82 PhP1.89 PhP1.97 PhP2.05

or partially prepared
with or without the
use of any machine
or instrument or
without being pressed
or sweetened
288
Sec. 144, supra.
289
Sec. 3(B)(1), RR 17-2012.

Tax Rates
1, 2013 1, 2014 1, 2015 1, 2016 1, 2017
(3) Fine-cut shorts and PhP1.75 PhP1.82 PhP1.89 PhP1.97 PhP2.05 Effective
refuse, scraps, 01-01-14,
clippings, cuttings, the specific
stems and sweepings tax rate
of tobacco shall be
increased
(4) Tobacco specially PhP1.50 PhP1.56 PhP1.62 PhP1.68 PhP1.75 by 4%
prepared for chewing every year
so as to be unsuitable thereafter
for use in any other
manner
b. Cigars, per cigar290
Tax Rates
1, 2013 1, 2014 1, 2015 1, 2016 1, 2017
(1) Ad valorem tax 20% 20% 20% 20% 20%

Based on NRP per
cigar (excluding the
excise tax and VAT)
(2) Specific tax PhP5.00 PhP5.20 PhP5.41 PhP5.62 PhP5.85 Effective

Per cigar 01-01-14,
the specific
tax rate
shall be
increased
by 4%291
290
Sec. 145, supra.
291
Under RA 10351 there is no mention of an increase of 4% in specific tax every
year effective January 1, 2014. However, under RR 17-2012, the said specific tax was
increased by 4% every year effective January 1, 2014, i.e. 2015 (PhP5.41); 2016 (PhP5.62);
2017 (PhP5.85) and 4% onwards.

c. Cigarettes, per pack292

Tax Rates293
1, 2013 1, 2014 1, 2015 1, 2016 1, 2017
(1) Packed by Hand294 PhP12.00 PhP15.00 PhP18.00 PhP21.00 PhP30.00 Effective

01-01-18,
the specific
tax rate
shall be
increased
by 4%
every year
thereafter
(2) Packed by Machine

If the NRP295
(excluding the excise
and VAT) per pack is:
PhP11.50 and below PhP12.00 PhP17.00 PhP21.00 PhP25.00 PhP30.00 Effective

01-01-18,
More than PhP11.50 PhP25.00 PhP27.00 PhP28.00 PhP29.00 PhP30.00 the
specific tax
rate shall
be increased
by 4%
every year
thereafter
292
Sec. 145, supra.
293
Sec. 3(B)(4) and (5), RR 17-2012.
294
“Cigarettes packed by hand” shall refer to the manner of packaging of cigarette
sticks using an individual person’s hands and not through any other means such as a
mechanical device, machine or equipment. [Sec. 2(c), RR 17-2012]
295
Sec. 145, supra.

Duly registered cigarettes whether packed by hand or

packed by machine shall only be packed by twenties and other
packaging combinations of not more than 20 sticks.296
Cigarettes introduced in the domestic market after the

effectivity of RA 10351 shall be initially tax classified according to
their suggested NRPs297.
The proper tax classification of cigarettes, whether

registered before or after the effectivity of RA 10351, shall be
determined every two (2) years from the date of the effectivity of
RA 10351.
All cigarettes existing in the market at the time of the

effectivity of RA 10351 shall be classified according to the NRPs
and the tax rates provided above based on the latest price survey
of cigarettes conducted by the BIR.
3. Petroleum Products298
a. Manufactured Oils and Other Fuels299
296
Provided, that, in case of cigarettes packed in not more than 20 sticks, whether
in 5 sticks, 10 sticks, and other packaging combinations below 20 sticks, the NRP of
each individual package of 5s, 10s, etc. shall be the basis of imposing the tax rate
prescribed under RA 10351. (Sec. 11, RR 17-2012)
297
Sec. 145, supra.
298
The BIR issued RR 2-2012 prescribing for the tax administration treatment of
petroleum and petroleum products imported into the Philippines, including those coming
in through Freeport Zone or Economic Zones and registration of all storage tanks,
facilities, depots and terminals.
299
Sec. 148, supra.

Article Rate
(1) Lubricating oils and greases including but not limited to PhP 4.50
base stock for lube oils and greases, and additives, per
liter and kilogram, respectively
(2) Processed gas, per liter of volume capacity PhP 0.05
(3) Waxes and petrolatum, per kilogram PhP 3.50
(4) Denatured alcohol to be used for motive power, per liter PhP 0.05
of volume capacity300
(5) Naphtha, regular gasoline and other similar products of PhP 4.35301
distillation
Naphtha, when used as a raw material in the PhP 0.00

production of petrochemical products or as replacement
fuel for natural gas-fired combined cycle power plant, in
lieu of locally-extracted natural gas during the non-
availability thereof, subject to the rules to be promulgated
by the Secretary of Energy in consultation with the
Secretary of Finance.
(6) Premium gasoline

Leaded PhP5.35
Unleaded PhP4.35
(7) Aviation turbo jet fuel PhP3.67
(8) Kerosene PhP0.00302
300
For purposes of the imposition of the excise tax rate of PhP0.05 per liter under
Section 148 (d) of the Tax Code, as amended, the bioethanol product shall have been
denatured before the release thereof from the customs custody, in case of importation;
or before removal thereof from the place of production, in case of locally manufactured
bioethanol, subject to the succeeding provisions of RR 8-2006. [Sec. 4 par. 2, RR 8-2006]
301
Reduced from PhP4.80 to PhP4.35 under RA 9337.
302

Article Rate
(9) Diesel fuel oil, and on similar fuel oils having PhP0.00303
more or less the same generating power
(10) Liquefied petroleum gas PhP0.00
Liquefied petroleum gas used for motive power Taxed as

diesel oil
(11) Asphalts, per kilogram PhP0.56
(12) Bunker fuel oil, and on similar fuel oils having more PhP0.00304
or less the same generating power
4. Miscellaneous Articles
a. Non-essential goods, based on wholesale price, net of excise tax

and VAT305
Article Rate
(1) Jewelry, whether real or imitation, pearls, precious and 20%

semi-precious stones and imitations thereof; good made
of, or ornamented, mounted or fitted with, precious
metals or imitations thereof of ivory (not including
surgical and dental instruments, silver plated wares,
frames or mountings for spectacles or eyeglasses, and
303
304
305
Sec. 150, supra. On imported items, the tax shall be based on the value of
importation used by the Bureau of Customs in determining tariff and customs duties,
net of excise tax and VAT.

Article Rate
dental gold or gold alloys and other precious metals

used in filling, mounting or fitting of the teeth); except
jewelries manufactured by qualified jewelry enterprises
under RA 8502; opera glasses and lorgnettes
(2) Perfume and toilet waters 20%
(3) Yachts and other vessels intended for pleasure or sports 20%
b. Automobiles, based on the manufacturer’s or importer’s

selling price, net of excise and value-added taxes306
Article Rate
Net manufacturer’s price/importer’s selling price
Up to PhP600 Thousand 2%
Over PhP600 Thousand to PhP1.1 million PhP12, 000 +

20% of value in
excess of
PhP600 thousand
306
Sec. 149, supra, as amended by RA 9224. The brackets reflecting the
manufacturer’s price or importer’s selling price, net of excise and value-added taxes,
will be indexed by the Secretary of Finance once every two (2) years if the change in
the exchange rate of the Philippine peso against the United States (U.S.) dollar is
more than 10% from the date of the effectivity of this Act, in the case of initial
adjustment and from the last revision date in the case of subsequent adjustments.
“Automobile” shall mean any four (4) or more wheeled motor vehicle
regardless of seating capacity, which is propelled by gasoline, diesel, electricity or
any other motive power. Buses, trucks, cargo vans, jeeps/jeepneys/jeepney
substitutes, single cab, chassis, and special-purpose vehicles shall not be considered
as automobiles.

Article Rate
Over PhP1.1 Million to PhP2.1 Million PhP112, 000 +

40% of value in
excess of
PhP1.1 Million
Over PhP2.1 Million PhP512,000 +

60% of value in
excess of
PhP2.1 Million
5. Mineral Products307
a. Per metric ton
Article Rate
Coal and coke, per metric ton PhP10.00
b. Based on the actual market value308 of the annual gross

output at the time of removal309
Article Rate
(1) Non-metallic minerals and quarry resources 2%
307
Sec. 151, supra.
308
For purposes of the excise tax on the sale of gold, “actual market value” shall
refer to the prices competitive with those prevailing in the world market regardless of
the volume or weight by which the BSP has agreed to buy the gold. (Sec. 4, RR 7-2008)
309
Sec. 151, supra., as amended by RA 7729. On imported products, the tax shall
be based on the value used by the Bureau of Customs in determining tariff and customs
duties, net of excise tax and VAT.

Article Rate
(2) Metallic minerals (copper and other metallic 2%

minerals, and gold and chromite)310
(3) Indigenous petroleum, based on the fair 3%

international market place311
C. TOBACCO INSPECTION FEES312
The following fees are collected for the inspection of the following
articles:
Article Rate
(1) Cigars, per thousand or fraction thereof PhP0.50
(2) Cigarettes, per thousand or fraction thereof PhP0.10
(3) Leaf tobacco, per kilogram or fraction thereof PhP0.02
(4) Scrap and other manufactured tobacco, per PhP0.03

kilogram or fraction thereof
310
Refer to RR 6-2012 for the clarification of the taxability of sale of gold and
other metallic minerals to Bangko Sentral ng Pilipinas and other persons or entities.
311
Sec. 151(4), supra. Pending promulgation of guidelines to determine the fair
international market price of indigenous petroleum, the tax base in computing the excise
tax due thereon shall be the contract price in an arms-length transaction between the
petroleum producer and the buyer including freight and insurance premium covering
the transportation of the indigenous petroleum to the domestic refineries.
312
Sec. 146, supra.

REPUBLIC OF THE PHILIPPINES
DEPAKI'rVIf.N'I. OF FINANCIE
BUREAU OF INTERNAI REVENUE
QLrezun City
RECET
January 5. 2018
REVENUE REGULATIONS NO. I - AO I S

SUBJECT : Providing for the Revised Tax Rates on Mineral Products pursuant
to the Provisions of Republic Act No. 10963, otherwise known as the
'oTax Reform for Acceleration and Inclusion (TRAIN) Laly"
Amending for the Purpose Revenue Regulations No. l3-94
TO All Internal Revenue Officers and Others Concerned.
SECTION 1. SCOPE. - Pursuant to the provisions of Section 244 irt relation to Sectiorr
245 of the National Intemal Revenue Code of 1997 (NIRC), as amended, and Section 84
of Republic Act No. 10963, otherwise known as the "Tax Retbrrn for Acceleration and
Ittclusion (TRAIN) Law''. these Regulations are hereby' proniulgated to antend the relevant
provisions of Revenue Regulations (RR) No. l3-94 by providing for the revised tax rates
on nrineral products.
SEC. 2. Amending Section 3 of RR No. 13-94
*SEC. 3. DEFINITION OF TERMS. - For pluposes of these Regulations. tlte

following words and phrases shall have the meaning indicated belor.r,:
a. xxx
xxxxxx xxx
g. Grct.ss Outpzrl shall be interpreted as the actual market value of ntinerals or

nrineral products or of bullion from each rnine or lnineral land operated as a
separate entily", r.r,ithout any deduction frorl mining- rnilling. refining (including
allexpenses incurred to prepare the said minerals or ntineral products in a
marketable state). as well as transporling, handling. nrarketing ol any other
expenses: Provicler{, That if the minerals or lnineral products are sold or
consigned abroad by the lessee or owner of the ntine under C.l.F. terms, the
actual cost of ocean fieight and insurance shall be deducted'. Prot,idad, hov,ct,er.
That in the case of milteral concerltrate. not traded in contmodiiT- exchanges in
the Philippines or abroad. such as copper concentrate. the actual ntarket value
shall be the rvorld price quotations of the refined nrineral ploducts content
thereof prevailing in the said commodity excharrges. after deducting the
smelling. refining and other charges incurred in the process of convefiing the
mineral concentrates into refined metal traded in those commodity exclranges:
xxx xxx xxx

V,
Rt'vcrt tt t' Rc'gt t I tt t i t tt t /t'lt t.
Page 2 of3
SEC.3. Amencling Section 5 of RR No. 13-94
..SEC. 5. PAYMENT OF IXCISE TAX ON MINIERALS AND MINERAL

PRODUCTS. -
A. Rula and lJo.se of Tax. -There shall be levied. assessed and collected on mineral.
nrineral products and quarry resources, excise tax as fbllows:
3.1 . On domestic and ilnported coal and coke:
Date of Effectivitv Excise Tax per Metric Ton

January l, 201 8 Fifty pesos (P50.00)
Januatry 1.2019 One hundred pesos (P100.00)
Jarruary 1.2020 and onwards One hundred and flfly pesos (P 150.00)
Coal produced under Coal Operating Contracts entered into by the

govenrment pursuant to Presidential Decree No. 972 as well as those exernpted fi'om
excise tax ort mineral products under other lalvs shall now be subiect to the
applicable rates above beginning Januan l, 201 8.
3.2. All nonnretallic nrinerals and quarw resolrrces:
Excise Tax
Locally extracted or produced Four percert (4%) based on the actual
market value of the gross outplrt thereof at
the time of rernoval.
Imported Four percenl (4%) based on the value used
by the Bureau of Customs (BOC) in
determining tariff and custonts duties. net
of excise tax and valLre-added tax.
Locally extracted natural gas Exempt.
and liquefied natural gas
J.J. All metallic minerals:
Excise Tax
Locally extracted or produced Four perceri (4%) based on the actual
copper. gold, chromite and other rnarket value of the gross output thereof at
nretallic minerals the time of removal.
lmporled copper. gold. chromite Four percent (4%) based on the value used
and other rnetallic minerals by the BOC in deternrining tariff and
custotxs dLrties, net of excise tax and value-
added tax.
3.4. lndigenous petroleum, a tax of six percer* {6%) of the fair international nrarket
price thereof^ on the first taxable sale. bafter', exchange or such similar
transaction. such tax to be paid by the bu1,er or purchaser before renroval frotn
the place of prodLrction. The phrase '.first tcLrablc .vulc. httrler, exchunge or
.similor trcmsuc/iort 'nreans the transfer of indigenous petroleurl in its original
.
,IU}iNAU OF ItrTEN,HAI, REVENIiE
;ttrcoilDs MGT. Drvls:c:i \fr'
tD: 'A' la' (D
JAl{ I 5 2018
,/,1, ,.,
ilHrtrE\/'IT'Ft
a bt- i-- -r. / .): -" .r.
Rcttenue Regulal ion |Vo,
Page 3 of 3
state to a first taxable transf'eree. The fair international market price shall be
detenrined in consultation with arr appropriate rrovernnrent agency.
For the purpose of this SLrbsection, 'incligutous petroleum 'shall include

locally-extracted mineral oil. hydrocarbon gas. bitunren. clude asphalt. mineral
gas arrd all other similar or naturally associated substances u,ith the exception of
coal. peat, bituminous shale and/or stratified tritteral deposrts."
B. xxx''
SEC. 4. REPEALING/AMENDATORY CLAUSE. - All regulations, r'ulings or orders

or portions thereof not consistent herer.vith are herebv revoked. repealed. nrodified or
anrerrded accold irrgll .
SEC. 5. EFFECTIVITY CLAUSE. -These RegLrlations shall take effect immediatell'

aftel its complete publication in a newspaper of general circulation.
CARLOS G. DOMING Z TII

Secretary of Finance
00071 B
JAN 1 1 ?018
Recomnrend in g Approval :
-/tro *.^{ta
DULAY
CAESAR R.
DUEEAU OF I}IIERIT{AT REI'ENIIE
IIECORI}S MGT. DTVISIGN
Conrrnissioner of Intenral Revenue tD" 43 A' 14'
a 12 4 5 I JAN 15 2ol8
Pl^hr^
RECEIVEU
BIR TRAIN IRR/RR Draftins Comrnittee

REPUBLIC OF THE PHILIPPINES BUBEAU OF INMNNAI, Ni;.iI.i;1:Ui,
DEI'AI{TMENT OF FINANCE *o%:,yg'iî;: '
BUREAU OF INTERNAL RE\'ENUE 'rAN
ls uf,lh^
QLrezon City RECETVEAL,
Januan', 5. 201 8
REVENUE REGULATIONS NO. 3 ' AD/g
SUBJECT : Providing for the Revised Tax Rates on Tobacco Products Pursuant
to the Provisions of Republic Act No. 10963, otherwise known as
"Tax Reform for Acceleration and Inclusion (TRAIN) Lan"',
Amending for the Purpose Revenue Regulations No. 17-2012
TO All Internal Revenue Olficers and Others Concerned.
SECTION t. SCOPE. - Pursuant to the provisions of Section 244 i"t relation to Section
245 of the National Internal Revenue Code of 1997 (NIRC), as amended and Section 84 of
Republic Act No. 10963, otherwise known as "Tax Reform for Acceleration and lnclusiou
(TRAIN) Law'', these RegLrlations are hereby promulgated to provide Ibr the revised tax
rates on cigalettes, amending cefiain provisions of Revenue Regulations (RR) No. I 7-
2012.
SEC. 2. AMENDATORY PROVISIONS. - The provisions of Section 3 Items B(4) and

B(5) of RR No. l7-2012 is hereby amended as follows:
"SEC. 3. REVISED RATES AND BASES OF THE SPECIFIC TAX. - There

shall be levied, assessed and collected an excise tax on tohacco products, in
accordance with the following schedule:
DATE OF EFFECTIVITY OF TAX RATES

Jan ua ry Jull' I, Januart,l, Januarl'l,
January l,
PRODUCT l, 201 8 2018 until 2020 until 2022 until
2424
until ,lune DecemLrer December Decemtrer
onwards
30.20r8 31,20t9 31,2021 31,2023
xxx
B. TOBACCO PRODUCTS
xxx
Per Pack Per Pack Per Pack Per Pack E,ffective
(4)Cigarettes packed by hand
Php 32.50
Php 35.00 Php 37.-s0 Php 40.00 I 112024. the
specific tax
(5) Cigarettes packed by rate shall be
r.nachine increased by
Php 32.50 Php 35.00 Php 37.50 Php 40.00
496 ever7,
Year
tliereafier
xxx
Reven ue Regul ctl ions lrlo
Page 2 of2
SEC. 4. REPEALING CLAUSE. - All regulations. rulings or orders or portions thereof

not consistent with the provisions o1'these RegLrlations are hereby revoked. repealed or
amended accordingly.
SEC. 5. EFFECTIVITY CLAUSE. - These Regulations shall take effect inrmediatell,

following its publication in a newspaper of gelteral circulatiott.
CARLOS G. DOMINreUEZ
i oooTte
JAt'l 1 1 2018
Recornrnendi ng Approva I :
-AY"xÂt'
CAESAR R. DULAY
1 BIiREAU
R
3F IiJIUBNAI BE*EI{'',E
gCOP.DS MGT. DTVIS]iON
tD:40 A.U,
'01245e
Commissioner of Internal Revenue
JAN t5 20tg
,rM*
RE CEtrVEW
BIR TRAIN IRR/RR Drafting Cornnrittee

REPUI]LIC OF THE PIIILIPPINES
DEPARTMENT OF FINANCF,
BITREAU 0f Snm}ilAl E[,*,'r,.,:.
REcoRrls irGT' igMsJutr
BUREAU OF INTERNAL RE\'ENUE
tD:4D A.M,
iAN l52Ut8, 1q
lll/1vva,L
Quezon City RECETVED
January 5, 2018
REVENUE REGULATIONS NO, 5 - 1"0 18
SUB.IECT : Reyenue Regulations Implementing the Adjustment of Rates on the

Excise Tax on Automobiles pursuant to the Provisions of Republic Act
No. 10963, otherwise known as the o'Tax Reform for Acceleration and
Inclusion (TRAIN) Law" Amending for the Purpose Revenue
Regulations No. 25-2003
TO : AII Internal Revenue Officers and Others Concerned.
SECTION 1. SCOPE. - Pursuant to the provisions of Section 244 in relation to Section 245
of the National lntemal Revenue Code of 1997 (NIRC), as amended. and Section 84 of
Republic ActNo. 10963, othetwise known as the "Tax Reform forAcceleration and Inclusion
(TRAIN) Law" tltese Regulations are hereby promulgated to these Regulations are hereby
promulgated to amend Revenue Regulations (RR) No. 25-2003 providing lor the revised tax
rates of excise tax on automobiles.
SEC. 2. Section 2 of RR No. 25-2003 is hereby amended as follor.vs:
"SEC.2. DEFINITION OF TERMS - For purposes of these RegLrlations, the

following words and phrases shall have the meaning indicated below:
(a) xxx
xxx. xxx xxx
(N) HYBRTD ELECTRTC VEHICLE - SHALL REFER TO A MOTOR

VEHICLE POWERED BY ELECTRIC ENERCY. WITH OR
WITFIOUT PROVISION FOR OFF-VEHICLE CI-IARGING. IN
COMBINATION WITH GASOLINE, DIESEL OR ANY OTHER
MOTIVE POWER: PROVIDED, THAT, FOR PURPOSES OF THIS
ACT. A I_IYBRID ELECTRIC VEHICLE MLJST BE ABLE TO
PROPEL ITSELF FROM A STATIONARY CONDITION USINC
SOLELY ELECTRIC MOTOR.''
SEC. 3. Section 4 of RR No. 25-2003 is hereby amended as follou,s:
..SEC. 4.
- RATES AND BASES OF THE AD VALOREM TAX ON
AtiTOMOBILES. There shallbe levied. assessed and collected an ad valoren.t tax on
automobiles based on the ntanufacturer's/assernbler's or inrpofter's selling price, net
lxf '
u./
Ret,cntte Regulations lVo _
Page 2 rfi-1
of excise and value-added tax, in accordance r,r,ith the fbllorving schedule.

EFFECTIVB JANUARY 1. 20I8:
NET MANUFACTURER'S TAX RATE

PRICE/ IMPORTER'S SELLING
PRICE
UP TO SIX HUNDRED FOUR PERCENT (4'2,)

THOUSAND PESOS (P600,000.00)
OVER SIX HUNDRED TEN PERCENT (10'%)

THOUSAND PESOS (P600,000.00)
TO ONE MILLION PESOS
(P1,000,000.00)
OVER ONE MILLION PESOS TWENTY PERCENT (20%)

(P1,000,000.00) To FouR
MILLION PBSOS (P4,000,000.00)
OVER FOUR MILLION PtrSOS FrFTY PERCENT (s0%)

(P4,000,000.00)
PROVIDED, THAT HYBRID \'EHICLES SHALL BE TAXED AT FIFTY

PERCENT (50%) OF THE APPLICABLE EXCISE TAX RATES ON
AUTOMOBILES SUBJECT TO THE CONDITIONS IN SECTION 9(E) OF
THIS REGULATIONS: PROVIDED, FURTHEN, THAT IN THE CASE OF
IMPORTED AUTOMOBILES NOT FOR SALE, THE TAX IMPOSED HEREIN
SHALL BE BASED ON THE TOTAL LANDED VALUE, INCLUDING
TRANSACTION VALUE, CUSTOMS DUTY AND ALL OTHER CHARGES."
SEC. 4. Section 9 is herebv amended as follows:
"SEC.9. TAX-EXEMPT REMOVALS OF AUTOMOBILES. The following

rentovals of locally lnanufactured/assembled or release of impofied autontobiles fi'ottt
the place of production or fi'om customs'custody, respectively, are exellpt fi'otn the
paylrent of the appropriate excise taxes subject to cettain conditions.
a. xxx
xxx xxx xxx
Ii. PT]RELY ELECTRIC VEHICLES SHALL BE EXEMPT FROM THE

EXCISE TAX ON AUTOMOBTLES. HYBRID VEHICLES SHALL
BE SUBJECT TO FIFTY PERCENT (50%) OF THE APPLICABLE
EXCISE TAX RATES ON AUTOMOBILES. PRIOR TO THE
REMOVAL OF THE AUTOMOBILES FROM THE
MANUFACTTIRING PLANT OR CUSTOMS CUSTODY, THE
DEPARTMENT OF ENERGY (DOE) SHALL DETERMINE
WHETHER THE AUTOMOBILES ARE HYBRID VEHICLES OR
. f,m'dtH8Ht,lffi
lD; 40 A. 14,
\,',
lq 2nlr t
IAN i ! Fvrv l J
,
Ex :nr r, .: * *. i-i-"'5';n-
ht
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ts.
t- ,r./ :r
It&, L& =/f .f_.
a:.'
I.f
Reven Lte Regulat i ons' No.
Page 3 of I
PURELY ELECTRIC VEHICLES, AND FURNISH THE

COMMISSIONER OF INTERNAL REVENUE, ATTENTION: CHIEF
EXCISE LARGE TAXPAYERS REGULATORY DIVISION
(ELTRD), CERTIFIED COPIES OF THE RESULTS OF SUCH
EXAMINATION OR TNDORSEMENT TO THAT EFFBCT.
F. PICK-UI'S."
SEC. 5. A nen, provision designated as Section 5-A in RR No. 25-2003 is hereby inserled to
read as follows:
..SEC.
5-A. VALIDATION OF MANUFACTURERS' AND IMPORTERS' SELLINC
PRICE. - By the end of three months frorr the inrposition of the new rates, the Bureau
of Internal Revenue shallvalidate the Manufacturer's or Impofter's Selling Price o1'the
nervly introduced nrodels against the Manufacturer's or lmporter''s Selling Price as
defined herein and initially determine the correct bracket under r'vhich a newl1,
introduced model shall be classified. After the end of one year fi'on such validation.
and every year thereafter, the Bureau of lnternal Revenue shall revalidate the initialll,
validated Net Manufacturer's or Importer's Selling Price against the Net
Manufacturer's or lmpofter's Selling Price as of the tirne of revalidation in order to
finally determine the corect tax bracket under which a newly introduced rnodel shall
be classified."
SEC. 6. TRANSITORY PROVISIONS
l. AII manufacturer's/assembler's or importers are hereby required to file an updated

manufacturer's/assemblers or inrporler's sworn statement for each brands/rlodels of
automobiles as of the da1,'immediatell'before the date of effectivity of these Regulations,
The updated nranufacturer's/assembler's or impofter's sworn statement sirall be
subnritted to the Comnrissioner of Intenral Revenue. Ailcn/iort'. Chief, Excise Large
Taxpayers Regulatory Division (ELTRD) within seven rvorking (7) da1,s 1,'o,.,', the date
of efTectivitl,of these Regulations. This sworn statenrent shall likeu,ise be sub-iected to
verification as required under existing regulations and issuances; and
2. All manufacturers/assemblers or impofiels shall submit a duly notarized list of inventoll'

on-hand of conrpletely bLrilt-up (CBU) automobriles. including Completely Knocked-
Down (CKD) and Semi-Knocked Down (SKD) units, that are located within the
manufacturing/assernbly plant. storage facility or warehouse or the clrstoms' prenrises
for which impoft entries have been filed as of the day inrmediately before the date of
effectivity of these RegLrlations, indicating therein the brand. year nrodel, engine. body
and chassis numbers thereof. The list shall be subrn itted to the Conrnr issioner of Internal
Revenue. Atlentictn'. Chief. E,xcise LT Field Operations Division (ELTFOD) rvithin
seven working (7) days fronr the date of ef{'ectivity of these Regulations. FailLtre to
sLrbmit the inventory list on the parl of the manufacturers/assenrblers/ itrporlers shall be
construed that the said nianufacturers/assemblers/ imporlers do not have any" inventory
on hand of CBUs. CKDs and SKDs as of the dav irnmediatelv before the date of
effectivitr o{' these Regulations.
BIJREAU OF IT{TEN|NAL BEvnflIT
npcoRDs McT. Dtl/Itic.x ut
lD:42 A't4'
JAN l5 2016 t,
DEIflEITI
rt.- E, E., IF, T J fu
RalLrtttc Rcgtrlut it tns lV,,.
Puge 1 of4
SEC. 7. REPEALING CLAUSE. - AII regulations. r'ulings or orders or portions thereof

which are inconsistent with the provisions of these Regulations are also hereby revoked.
repealed or amended accordingly.
SEC. 8. EFFECTIVITY CLAUSE. - These Regulations shall take ef-fect on .lartrarv l. 201 8
fbllorving its complete publication in the Official Gazettes or in at least one (1) newspaper of
general circulittion.
JAil 1 1 2018
Recomnrending Approval :
,1trÂ*^?
CAESAR R. DULAY RECORDS
--
TWDIUB
BIJBF,AU OF INTEBNAT
MGT. DI-1'ISiuX
Commissioner of lnternal Revenue lo : 4o A'rl'
412459 JAN l52Al8,14
//wqr*
RECEIV.ED'
BIR TRAIN IRR/RR Drafting Cornnifiee

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REPUBLIC ACT NO.

AN ACT TO PROMOTE THE ESTABLISHMENT OF BARANGAY MICRO

Sec. 2. Declaration of Policy. — It is hereby declared to be the policy of the

(a) "Barangay Micro Business Enterprise," hereinafter referred to as BMBE,

REGISTRATION AND OPERATION OF BMBEs

As much as possible, BMBEs shall be subject to minimal bureaucratic

Sec. 5. Who are Eligible to Register. — Any person, natural or juridical, or

Sec. 6. Transfer of Ownership. — The BMBE shall report to the city or

Any existing laws to the contrary notwithstanding, interests, commissions and

Sec. 10. Technology Transfer, Production and Management Training, and

The DTI, in coordination with the private sector and non-government

Sec. 12. Information Dissemination. — The Philippine Information Agency (PIA),

Sec. 15. Implementing Rules and Regulations. — The Secretary of the

Sec. 17. Repealing Clause. — Existing laws, presidential decrees, executive

Approved: November 13, 2002

Local government units (LGUs) derive their revenues from local

I. TAXING POWERS OF LOCAL GOVERNMENTS

A. Taxes on Real Property

a. Basic Real Property Tax

The real property tax (RPT) is an ad valorem tax on

220 Guide to Philippine Taxes

Provinces - Not exceeding 1% of the

Cities or Municipalities - Not exceeding 2% of the

The RPT is based on the assessed value which is a certain

Class Assessment Levels

(2) Buildings and Other Structures

The rate progresses directly with the fair market value

Residential – 0% for those with FMV of

Guide to Philippine Taxes 221

Agricultural – 25% for those with FMV of

Commercial/Industrial – 30% for those with FMV of

Timberland – 45% for those with FMV of

Class Assessment Levels

Actual Use Assessment Levels

222 Guide to Philippine Taxes

Exemptions: The following are exempted from payment of

Real property owned by the Republic of the Philippines or

Charitable institutions, churches, parsonages, or convents

All machineries and equipment that are actually, directly and

All real property owned by duly registered cooperatives as

Machinery and equipment used for pollution control and

Except as provided in the LGC, any exemption from the payment

Guide to Philippine Taxes 223

b. Special Levies on Real Property

(1) Special Education Fund Tax375

In addition to the basic RPT, a province or city, or a

(2) Idle Lands Tax376

A province or city, or a municipality within the MMA

(a) Agricultural lands, more than one (1) hectare in area,

(b) Lands, other than agricultural, located in a city or

224 Guide to Philippine Taxes

meters in area, one-half of which remain unutilized or

Regardless of land area, the tax shall likewise apply

The LGU may exempt idle lands from the additional

(3) Special Levy379

A province, city or municipality may impose a special

The special levy shall not apply to lands exempt from

Guide to Philippine Taxes 225

(4) Other Impositions on Real Property

a. Socialized Housing Tax380

In addition to the RPT and SEF tax, a socialized

b. Tax on Transfer of Real Property Ownership381

A province, city or municipality within the MMA

The sale, transfer or other disposition of real