Rules on mineral, auto cigarette tax hikes out

/ 05:14 AM January 19, 2018

The Bureau of Internal Revenue has issued the guidelines for the increase in the excise taxes on minerals, cigarettes, vehicles, and in the documentary stamp tax rates under the Tax Reform for Acceleration and Inclusion (TRAIN) act.

The four revenue regulations (RR) signed by Finance Secretary Carlos G. Dominguez III and Internal Revenue Commissioner Caesar R. Dulay and published yesterday, which will serve as the implementing rules and regulations of Republic Act No. 10963, were earlier deemed by the BIR as the “least contentious” among the TRAIN’s different provisions.


Under RR 1-2018, the BIR said the excise tax on domestic as well as imported coal and coke would be P50 per metric ton starting Jan. 1 this year, P100 on Jan. 1, 2019, and P150 from Jan. 1, 2020 onward.

“Coal produced under coal operating contracts entered into by the government pursuant to Presidential Decree No. 972 and those exempted from excise tax on mineral products under other laws shall now be subject to the applicable rates above beginning Jan. 1, 2018,” RR 1-2018 read.


The excise tax on locally extracted or produced
nonmetallic minerals and quarry resources will be 4 percent based on the actual market value of the gross output at the time of removal; for imports, the tax will be 4 percent based on the value used by the Bureau of Customs in determining tariff and customs duties, net of excise tax and value-added tax, the BIR said.

Locally extracted natural gas and liquefied natural gas are exempted from excise tax.

Locally produced copper, gold, chromite and other metallic minerals will be slapped a 4-percent excise tax based on the actual market value of the gross output at the time of removal.

For imported copper, gold, chromite and other metallic minerals, the 4-percent tax will be based on the value used by the BOC in determining tariff and customs duties, net of excise tax and value-added tax.

“For indigenous petroleum, the tax is 6 percent of the fair international market price on the first taxable sale, barter, exchange or such similar transaction, such tax to be paid by the buyer or purchaser before removal from the place of production,” the BIR said.

The BIR defined indigenous petroleum as “locally extracted mineral oil, hydrocarbon gas, bitumen, crude asphalt, mineral gas and all other similar or naturally associated substances with the exception of coal, peat, bituminous shale and/or stratified mineral deposits.”

For cigarettes, RR 3-2018 provides for unitary excise rates of P32.50 per pack from Jan. 1 to June 30, 2018; P35 from July 1, 2018 to Dec. 31, 2019; P37.50 from Jan. 1, 2020 to Dec. 31, 2021, and P40 from Jan. 1, 2022 to Dec. 31, 2023.


From Jan. 1, 2024 onward., “the specific tax rate shall be increased by 4 percent every year thereafter,” based on RR 3-2018.

According to RR 5-2018, the ad valorem taxes on automobiles will be as follow: 4 percent for units with a net manufacturer’s price/importer’s selling price of up to P600,000; 10 percent for units priced over P600,000 to P1 million; 20 percent for those priced over P1 million to P4 million, and 50 percent for luxury vehicles priced over P4 million.

Hybrid vehicles, on the other hand, will be taxed at half of the applicable excise tax rates.

Electric vehicles as well as pickup trucks will enjoy exemption from excise taxes. —BEN O. DE VERA

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TAGS: (TRAIN) act, Bureau of Internal Revenue, Caesar R. Dulay, Carlos G. Dominguez III, cigarettes, documentary stamp tax rates, excise taxes, minerals, vehicles
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