Specific Tax Rate on importation of Cigars:

Effective on year with 20% Ad valorem tax rate?

2016 - P 5.62

2017 - P 5.85

2018 - P 6.08

2019 - P 6.32

2020 - P 6.58

CIGARS AND CIGARETTES

Cigars – a cylinder of tobacco rolled in tobacco leaves for smoking.

Cigarettes – a thin cylinder of finely cut tobacco rolled in paper for smoking.

Tobacco – a preparation of the nicotine-rich leaves, which are cured by a process of drying and fermentation for
smoking or chewing.

Excise Tax – An excise tax is a legislated tax on specific goods or services at purchase such as fuel, tobacco, and
alcohol.

CIGARS EXCISE TAX TABLE:

EFFECTIVITY AVTR STR

2013 20% P 5.00

2014 20% P 5.20

2015 20% P 5.41

2016 20% P 5.62

2017 20% P 5.85

2018 20% P 6.08

2019 20% P 6.32

2020 20% P 6.58

 CIGARETTES PACKED BY HAND EXCISE TAX TABLE:

EFFECTIVITY SPECIFIC TAX RATE

PER PACK

2013 P 12.00

2014 P 15.00

2015 P 18.00

2016 P 21.00

2017 P 30.00

2018 P 32.50

2019 P 35.00

2020 P 37.50

CIGARETTES PACKED BY MACHINE E.T. TABLE

NRP 2013 2014 2015 2016 2017 2018 2019 2020

Per pack
NRP P 11.50
or less P 12.00 P 17.00 P 21.00 P P 30.00 P 32.50 P 35.00 P 37.50
25.00
NRP more than
P 11.50 P 25.00 P 27.00 P 28.00 P P 30.00 P 32.50 P 35.00 P 37.50
29.00

TOBACCO PRODUCTS EXCISE TAX TABLE PER KG

Tobacco 2013 2014 2015 2016 2017 2018 2019 2020

Products
A. Tobacco twisted by hand
P 1.75 P 1.82 P 1.89 P 1.97 P 2.05 P 2.13 P 2.22 P 2.31

B. Tobacco prepared or partially

prepared with or without the use of
machine P1.75 P 1.82 P 1.89 P 1.97 P 2.05 P 2.13 P 2.22 P 2.31

C. Fine-cuts short and refuse, scraps,

clippings, cutting, stems & sweeping
P 1.75 P 1.82 P 1.89 P 1.97 P 2.05 P 2.13 P 2.22 P 2.31

D. Chewing Tobacco, unsuitable in any

other manner
P 1.50 P 1.56 P 1.62 P 1.69 P 1.75 P 1.82 P 1.89 P 1.97
Formulas:

ET =      STR   x    NOPacks ET =      NOC    x     (0.2 NRP + 5.20)

NOP =     ET    x     1 pack

          STR

ET w/ VAT =     NOPacks   x   STR   x   VAT

                Pack

ET =      No. of sticks   x   No of lbs.    x      0.4536 kg       x       STR

            Stick                    Pound

Practical Exercises:

1. There are 25 boxes of Karelia Slim Cigarettes produced by the largest tobacco manufacturer was imported from
Greece and packed by machine, each box contains 20 reams and total number of packs of 85,550, determine the total
excise tax (ET) if the NRP of P 17.50 per pack imported on June 26, 2019.

Formula: ET =      STR   x    NOPacks

Solution: ET = P 35.00 x 85,550 Packs

ET = P 2,994,250.00

2. A container arrived in Port of Manila loaded with Kent Lights Cigarettes owned by R.J. Reynolds Tobacco Company
imported from USA on August 28, 2019 pack by hand. The said company upon arrival paid a total excise tax of P
220,640.00 with SRP of P 8.50, compute the number of packs (NOP) were imported.

Formula: NOP = ET x 1 pack

STR

Solution: NOP = P 220,640.00 x 1 pack

P 35.00

NOP = 6,304

3. A cargo of Nat Sherman, a luxury cigarettes produced by Altria arrived with 34,560 packs from New York City, USA
packed by machine and NRP per pack of P 7.50. Compute the total amount of excise tax inclusive of VAT if the cargo
arrived in Port of Legaspi on March 12, 2018 loaded in MV American President Lines.

Formula: ET w/ VAT = NOPacks x STR x VAT

Pack

Solution: ET w/ VAT = 34,560 packs x P 32.50 x 1.12

Pack

ET w/ VAT = P 1,257,984.00
4. The Davidoff importing 350 boxes of both Gold and Classic brands of Cigars from Dominican Republic arrived in
Port of Cagayan on January 11, 2019, the shipment contains a total of 6,125 cigars and each cigars has a NRP of P
250.00, compute the total excise tax, VAT inclusive.

Formula: ET = NOC x (0.2 NRP + STR)

Solution: ET = 6,125 Cigars x {(0.2 x P 250.00) + P 6.32}

ET = 6,125 Cigars x (P 50.00 + P 6.32)

ET = 6,125 Cigars x P 56.32

ET = P 344,960.00 x 1.12

ET w/ VAT = P 386,355.20

5. The MV British American was arrived in Port of Iloilo on May 10, 2020 coming from British Republic, the shipment
having 125 sticks of Dunhill Tobacco fine-cut shorts, each stick weighs is 360 pounds, compute the amount of excise
tax (ET) .

Formula: ET = No. of sticks x No of lbs. x 0.4536 kg x STR

Stick Pound

Solution: ET = 125 sticks x 360 lbs. x 0.4536 kg x P 2.31 / kg

Stick Pound

ET = P 47,151.72
Practical Exercises:

1. The shipment of Parliament Chewing Tobacco was arrived coming from Costa Rica on July 02, 2020 consisting of
80 bundles of chewing tobacco, each bundle having a weight of 124 lbs. Compute the total excise tax inclusive of
VAT.

Formula:

ET =      No. of sticks   x   No of lbs.    x      0.4536 kg       x       STR

 Stick                    Pound

Solution:

ET = 80 bundles x 124 lbs x 0.4536 kg x P 1.97 / kg

Bundle lbs.

ET = P 8,864.43 x 1.12

ET w/ VAT = P 9,928.16

2. Vogue Menthol Super Slim Cigarettes contained 120 boxes was arrived coming from United Kingdom (UK) and said
packed by machine, based on the declaration, each box contains 75 reams and each ream consisting of 12 packs,
compute the number of packs (NOPacks), if the NRP per pack is P 27.50.

Formula:

NOPacks = No. of packs x No. of reams x NOBoxes

Ream Box

Solution:

NOPacks = 12 packs x 75 reams x 120 boxes

Ream Box

NOPacks = 108,000 packs

3. Mr. Lucas E. Reyes, importer of Sobranie, one of the oldest cigarettes brands in the world based in England which
is owned by Japan Tobacco was arrived on February 21, 2019 with a total excise tax of P 5,434,670.00 being paid
and has a SRP of P 120.00 per pack, determine the net retail price (NRP) and specific tax rate (STR), if Mr. Reyes
declared the mark-up price of 85%.

Formula:

NRP = SRP x Mark-up

Solution:

NRP = P 120.00 x 0.15 (85%)

NRP = P 18.00

STR = P 35.00 (NRP is more than 11.50; year 2019)

4. A shipment from England-based the Chancellor Tobacco Company, the most expensive cigarettes brand in the
world have a total of 150 reams packed by hand and each ream have 30 sticks was arrived in Kalibo Airport in Aklan
on May 21, 2016, compute the number of packs (NOPacks) if the NRP per pack is P 35.50 and STR is P 25.00.

Formulas:
NOSticks = No. of Reams x No. of sticks /ream
NOPacks = No. of sticks
20 sticks per pack (fixed)

Solution:
NOSticks = 150 reams x 30 sticks per ream
NOSticks = 4,500 sticks

NOPacks = 4,500 sticks

20 sticks per pack

NOPacks = 225

5. The Armour Cigars manufactured by Armour Indonesia Limited being imported by Philip Morris as exclusive
distributor in the Philippines importing 850 boxes of cigars and each box contains 30 cigars with each cigars has a
NRP of P 200.00, compute the total number of cigars if the STR is P 28.00 arrived on October 10, 2015 with dutiable
value of P 1,345,550.00.

Formula:
NOCigars = NOBoxes x NOCigars
Box
Solution:
NOCigars = 850 Boxes x 30 Cigars
Box
NOCigars = 25,500

Compute and submit the following:

1. There are 30 boxes of Cigarettes was imported from Lebanon and packed by machine, each box contains 25 reams
and a total number of packs of 60,250, determine the total excise tax (ET) if the NRP of P 17.50 per pack imported on
April 12, 2019.

Formula: ET =      STR   x    NOPacks

=      P 35.00      x     60,250

ET =      P 2,108,750.00

2. A container arrived loaded with Cigarettes imported from New Zealand on May 18, 2019 pack by hand and upon
arrival importer paid a total excise tax of P 245,850.00 with SRP of P 7.50, compute the number of packs (NOP) were
imported.

Formula: NOP =     ET    x     1 pack

            STR

=     P 245,850.00 x 1 pack
      P 35.00

NOP =  7,024
3. A cargo of cigarettes arrived with 15,290 packs from Canada packed by machine and NRP per pack of P 7.50.
Compute the total amount of excise tax inclusive of VAT if arrived on September 23, 2018.

Formula: ET w/ VAT =     NOPacks   x   STR   x   VAT

      Pack

=    15,290 packs  x   P 32.50  x   1.12

ET w/ VAT = P 556,556.00 

1. A shipment of Juicy chewing Tobacco arrived from London  on April 23, 2018 having 125 bundles contained in 40-
footer containers. Based on the declaration of a declarant, each bundle has a weight of 65 lbs. Compute the total
excise tax inclusive of VAT.

Formula: ET =      No. of bundles   x   No of lbs.    x      0.4536 kg       x       STR

Bundle                    lbs.

Solution: ET =      125 bundles   x   65 lbs.    x      0.4536 kg       x       1.82

                      Bundle                    lbs.

ET =     P 6,707.61 x 1.12

ET =     P 7,512.52

2. The Fortune cigarette with 115 boxes was arrived from Mexico, packed by machine and each box contains 35
reams and each ream consisting of 20 packs, compute the number of packs if the NRP per pack is P 15.00.

Formula:       NOPacks =      No. of packs     x     No. of reams     x      No. of boxes

            Ream                     Box
      
Solution:       NOPacks =      20 packs     x     35 reams     x      115 boxes
          Ream             Box
     
      NOPacks =      80,500 Packs

1. A Tobacco Company, imported 50 reams packed by hand of cigarettes from Mexico and each ream have 20 sticks
arrived on February 18, 2018 at Port of Batangas, compute the number of packs (NOPacks) if the NRP per pack is P
25.50 and STR is P 22.50.

Formula and Solution:

NOSticks      =   No. of Reams    x    No. of sticks per ream

NOSticks      =   50 Reams    x    20 sticks per ream

NOSticks      =   1,000 Sticks

    NOPacks      =    1,000 sticks

              20 sticks per pack (fixed)

NOPacks      =    50 Packs

              
2. A container imported with 455 boxes of cigars coming from Hong Kong with each box contains 15 cigars with each
cigars has a NRP of P 180.00, compute the total number of cigars if the STR is P 26.00 arrived on July 22, 2016 with
dutiable value of P 1,520,375.00.

Formula: NOCigars =      NOBoxes   x    NOCigars

          Box  

Solution: NOCigars =      455 Boxes   x    15 Cigars

          Box  

NOCigars =      6,825 Cigars

COMPUTATION OF EXCISE TAXES

CONVERSION UNITS SPECIFIC TAX RATE FOR MINERALS PRODUCTS PER MT (PD 972)

2018 2019 2020

P 50.00 P 100.00 P 150.00

PETROLEUM PRODUCTS

Product Type 2018 2019 2020

(a) Lubricating oils and greases, including but not limited to base stock for
lube oils and greases, high vacuum distillates, aromatic extracts and other
similar preparations, and additives for lubricating oils and greases, whether
such additives are petroleum based or not, per liter and kilogram
respectively, of volume capacity or weight Php8.00 Php9.00 Php10.00

(a.1) Locally produced or imported oils previously taxed but are subsequently
reprocessed, re-refined or recycled, per liter and kilogram of volume capacity or
weight.
Php8.00 Php9.00 Php10.00

(b)Processed gas, per liter of volume capacity

Php8.00 Php9.00 Php10.00

(c)Waxes and petrolatum, per kilogram

Php8.00 Php9.00 Php10.00

(d)Denatured alcohol to be used for motive power , per liter of volume

capacity
Php8.00 Php9.00 Php10.00

(e)Asphalt, per kilogram

Php8.00 Php9.00 Php10.00

(f)Naphtha, regular gasoline, pyrolysis gasoline and other similar products of

distillation, per liter of volume capacity
Php7.00 Php9.00 Php10.00

(g)Unleaded premium gasoline, per liter of volume capacity

Php7.00 Php9.00 Php10.00

(h)Kerosene, per liter of volume capacity

Php3.00 Php4.00 Php5.00

(i)Aviation turbo jet fuel,aviation gas, per liter of volume capacity

Php4.00 Php4.00 Php4.00
 (j)Kerosene when used as aviation fuel, per liter of volume capacity
Php4.00 Php4.00 Php4.00

(k)Diesel fuel oil, and on similar fuel oils having more or less the same
generating power, per liter of volume capacity
Php2.50 Php4.50 Php6.00

(l)Liquified petroleum gas used for motive power, per kilogram

Php2.50 Php4.50 Php6.00

(m)Bunker fuel oil, and on similar oils having more or less the same
generating power, per liter of volume capacity
Php2.50 Php4.50 Php6.00

(n)Petroleum coke, per metric ton

Php2.50 Php4.50 Php6.00

(o)Liquified petroleum gas, per kilogram Php1.00 Php2.00 Php3.00

(p)Naphtha and pyrolysis gasoline, when used as raw material in the
production of petrochemical products or in the refining of petroleum
products, or as replacement fuel for natural-gas-fired-combined cycle power
plant, in lieu of lacally-extracted natural gas during the non-availability
thereof, per liter of volume capacity Php0.00 Php0.00 Php0.00

(q)Liquified petroleum gas, when used as raw material in the production of

petrochemical products, per kilogram
Php0.00 Php0.00 Php0.00

(r)Petroleum coke when used as feedstock to any power generating facility,

per metric ton
Php0.00 Php0.00 Php0.00

NON – ESSENTIAL GOODS / MINERALS PRODUCTS

Non – Essential Goods 20% - based on the wholesale price or the value of importation used by the Bureau of Customs
in determining Tariff and Customs Duties, net of Excise and Value-Added taxes
Copper, Gold, Chromite and 4% - based on the value used by the Bureau of Customs in determining Tariff and Customs
Metallic Minerals Duties, net of Excise and Value-Added taxes

CONVERSION OF UNITS

Length Weight Volume

1in = 2.54 cm 1 oz = 28.35 gm 1 gal = 3.78 L
1 ft = 12 in 1 lb = 0.4536 kg 1 fl. Oz = 29.57 ml
1 m = 3.28 ft 1 kg = 2.2046 lbs 1 L = 1,000 ml
1 yd = 3 ft 1 mt = 1,000 kg 1 in3 = 16.39 cm3
1 mi = 1.61 km 1 kg = 1,000 gm 1 ft3 = 1,728 in3
1 m3 = 35.32 ft3
1 yd = 27 ft3
1 cbm = 1,000,000 cm3

Formulas:
 ET =     No. of MT    x    STR per MT ET =      DV in Php   x    20%

ET/Drum =       STR per kg     x    Kg per Drum     VAT =      VAT Base   x    1.12
     Drum

Kg/Drum =       No. of pounds    x     0.4536 kg   

  Drum                        Lbs.

Practical Exercises:

1. The Ocean-gold Philippines, a registered mining company from Eastern Visayas importing copper and gold mines
from Vietnam, the shipment have a total Metric Tons of 12,550 and FOB value of $ 8,550.00 imported on April 02,
2019, compute the amount of excise tax inclusive of VAT.

Formula: ET =     No. of MT    x    STR per MT

Solution:
  ET =     12,550 MT    x     P 100.00 / MT     

ET =     P 1,255,000.00    x     1.12 VAT

ET w/ VAT =     P 1,405,600.00

2. The DPWH importing asphalt from Cambodia on November 18, 2019 and each drum with a gross weight of 4,560
pound and with a dutiable value of P 15.50 per kg, compute the excise tax per drum if the specific tax is amounting to
P 322,460.00.

Formula:    1) ET/Drum =       STR per kg     x    Kg per Drum    

     Drum

                    2)    Kg/Drum =       No. of pounds    x     0.4536 kg   (conversion)

  Drum                        Lbs.
Solution:

  Kg/Drum =       4,560 lbs.    x     0.4536 kg   

                Drum                     lbs.

Kg/Drum =       2,068.42 kg

ET/Drum =       2,068.42 kg     x     P 9.00 per asphalt per kg   

                          

ET/Drum =       18,615.74 per drum

3. The Gold Smith & Jewelry importing 250 sets of various jewelries from West Malaysia, compute the total excise tax
inclusive of VAT if the Dutiable Value is P 245,560.00 with Rate of duty of 35% and Rate of Exchange of P 52.00 / $
1.00.

Formula: ET =      DV in Php   x    20%

Solution:
   ET =    P 245,560.00   x     0.20    (AVTR for Sec. 150 Non-essential Goods)

ET =    P 49,112.00   x   1.12

         ET w/ VAT =    P 55,005.44

4. Mr. Efren De Luna imported 12 metric tons of Naphtha flammable liquid hydrocarbon to be used as raw materials in
production petrochemicals coming from India with the total landed cost of P 124,760.00 and miscellaneous expense of
P 11,223.00. Compute the total value added tax if the importer paid the total excise tax of P 56,560.00.

Formula: 1) VAT =      VAT Base   x    1.12

2) VB =      LC + ET

Solution:
VB =      P 124,760.00   +    P 56,560.00

VB =      P 181,320.00

VAT =      P 181,320.00   x    1.12

VAT =      P 203,078.40

Practical Exercises:

1. On November 10, 2018, the Air Asia Airlines Corporation importing 1,000,000 gallons of aviation turbo jet fuel from
Singapore with the total FOB value of $ 450,500.00 with ocean freight of $ 5,560.00, insurance of $ 1,245.00 under
the rate of duty of 30%, compute the total excise tax (ET).

Formula:
NOLiters = NOGallons x 3.78 liters
Gallon
ET = NOLiters x STR for aviation gas per liter

Solution:
NOLiters = 1,000,000 gallons x 3.78 liters
Gallon
NOLiters = 3,780,000 liters

ET = 3,780,000 liters x P4.00 (rate for aviation gas per liter)

ET = P 15,120,000.00

2. The Motors Supplies, Inc. importing 200 drums of waxes and petrolatum coming from Bangladesh and each drum
with a net weight of 2,500 kgs and dutiable value of P 12.50 per kg, compute the total No. of drums imported and total
dutiable value if the specific tax paid is amounting to P 1,245,350.00 inclusive of VAT.

Formula:

DV = DV per kg x Total Kg

Total Kg = No. of Drums x Kg

Drum
Solution:

Total Kg = 200 Drums x 2,500 kgs

Drum
Total Kg = 500,000 kgs

DV = P 12.50 per kg x 500,000 Kgs

DV = P 6,250,000.00
3. Compute the dutiable value in peso inclusive of VAT of the shipment pearl & diamond arrived from Saudi Arabia on
September 11, 2018 if the FOB value is $ 32,540.00, Freight charges is $ 3,230.00 and Insurance of $ 1,210.00, RE is
P 52.00 / $ 1.00 and the importer paid the specific tax amounting to P 780,560.00.

Formula: DV = FOB + Freight + Insurance

Solution:
DV = $ 32,540.00 + $ 3,230.00 + $ 1,210.00
DV = $ 36,980.00 x RE P 52.00
DV = P 1,922,960.00 x 1.12

DV w/ VAT = P 2,153,715.20

4. Importation of 15 MT Chromite and other metallic minerals from the country of Congo was arrived at MICP with a
CIF value of $ 122,530.00, Freight and Insurance are amounting to $ 2,345.00 and $ 1,120.00 respectively, determine
the excise tax (ET) if the ME is amounting to P 5,450.00, the RE is P 52.00 and its duty rate was 3%.

Formula: ET = DV in Php x 4% (AVTR for chromite & other metallic products)

Solution:

ET = $ 122,530.00 x RE P 52.00

ET = P 6,371,560.00 x 0.04

ET = P 254,862.40