While waiting for implementing rules and regulations (IRR) of the Tax Reform for Inclusion and Acceleration (TRAIN), commodities with increased excise tax under the new law should be assessed as goods under “provisional assessment”, Customs Commissioner Isidro Lapeña said in a recent order.
In a memorandum dated December 29 and signed January 11, Lapeña said that pending the issuance of the TRAIN’s IRR, “all district collectors and sub-port collectors are directed to assess the covered importations, except fuel products, under provisional assessment and conditional release in the meantime, in accordance with Section 403 of the CMTA (Customs Modernization and Tariff Act) where the goods shall be conditionally released subject to final liquidation.”
Section 403 states that, “Where the declarant does not have all the information or supporting documents required to complete the goods declaration, the lodging of goods declaration may be allowed. Provided, that it substantially contains the necessary information required by the Bureau and the declarant undertakes to complete the information or submit the supporting documents within forty-five (45) days from the filing of the provisional goods declaration, which period may be extended by the Bureau for another forty-five (45) days for valid reasons.
“If the Bureau accepts a provisional goods declaration, the duty treatment of the goods shall not be different from that of goods with complete declaration.
“Goods under provisional declaration may be released upon posting of any required security equivalent to the amount ascertained to the applicable duties and taxes.”
Lapeña’s latest memo noted that Republic Act (RA) 10963, or TRAIN, which was signed by President Rodrigo Duterte in December last year, raises duties and taxes on imported fuel, cars, coal, and sweetened drinks.
It said that “accordingly, the covered importations shall then be assessed based on the provisions of the TRAIN and the corresponding regulations to be issued.”
Under TRAIN, the excise tax rate on sugar-sweetened beverages is P6 per liter for drinks using artificial sweeteners, and P12 per liter for drinks using high-fructose corn syrup.
For tobacco, tax rates are increased to P32.50 per pack from January 1 to June 30, 2018; P35 per pack from July 1, 2018 to December 31, 2019; P37.50 per pack from January 1, 2020 to December 31, 2021; and P40 per pack from January 1, 2022 to December 31, 2023. Starting 2024, rates of tax for tobacco shall be increased by 4% annually.
Automobile excise tax rates will become 4% for vehicles with a manufacturer’s price of up to P600,000; 10% for over P600,000 to P1 million; 20% for over P1 million to P4 million; and 50% for above P4 million.
For coal, the excise tax will become P50 per metric ton (MT) in the first year of TRAIN’s implementation; P100/MT in the second year; and P150/MT for the third and succeeding years.
Last January 17, some BOC officials and personnel attended a TRAIN Updates and Classification Summit facilitated by its Assessment and Operations Coordinating Group.
BOC’s sister agency, Bureau of Internal Revenue, has started public consultations on some provisions of TRAIN, which is the first package under the government’s Comprehensive Tax Reform Program. The internal revenue agency has also issued corresponding regulations implementing some provisions of the law, including new excise tax rates on automobiles and tobacco. – Roumina Pablo
Image courtesy of Stuart Miles at FreeDigitalPhotos.net
