Excise Tax (2026 Guide)
Tax on alcohol, tobacco, fuel, and other sin goods. Specific or ad valorem rates. File monthly via eBIR.
The Definition
Excise tax is an indirect tax imposed on the manufacture, production, or importation of specific goods in the Philippines, primarily "sin goods" such as alcoholic beverages, tobacco products, and petroleum products. Governed by the National Internal Revenue Code (NIRC) Book IV, Sections 131–142, and amended by the Tax Reform for Acceleration and Inclusion (TRAIN) Law (RA 10963) and CREATE Law (RA 11534), excise tax rates vary by product category and are applied either as a specific tax (per unit) or ad valorem tax (percentage of value). The Bureau of Internal Revenue (BIR) administers excise tax collection, and manufacturers, producers, and importers are the primary taxpayers.
Who Pays This Tax
Excise tax is paid by manufacturers, producers, and importers of excisable goods in the Philippines. Under NIRC §131, the tax attaches at the point of manufacture or importation. Retailers and consumers do not directly file excise tax returns; however, the tax is embedded in the final price of goods. Specific taxpayers include:
- Alcohol manufacturers: Distilled spirits, wines, beer, and other fermented beverages.
- Tobacco manufacturers: Cigarettes, cigars, and other tobacco products.
- Petroleum importers: Gasoline, diesel, and other fuel products.
- Other goods: Automobiles, coal, and certain chemicals (as specified by BIR).
Importers are treated as manufacturers for excise tax purposes under NIRC §131(a).
How It's Calculated
Excise tax is calculated using one of two methods: specific tax (fixed amount per unit) or ad valorem tax (percentage of selling price or value). The method depends on the product category.
Specific Tax (Per Unit)
Formula: Excise Tax = Quantity × Specific Rate per Unit
Example: A manufacturer produces 10,000 cases of beer. Assume an illustrative specific excise rate for beer of ₱X per liter (the actual per-liter rate is indexed annually under RA 11467 — confirm the current figure in the latest BIR RMC). If each case contains 24 bottles of 330 mL:
- Total volume = 10,000 cases × 24 bottles × 0.33 liters = 79,200 liters
- Excise tax = 79,200 liters × the current per-liter rate
Ad Valorem Tax (Percentage)
Formula: Excise Tax = Selling Price (or Dutiable Value) × Ad Valorem Rate
Example: An importer brings in 500 units of automobiles with a dutiable value of ₱1,500,000 per unit. The ad valorem excise tax rate for automobiles is 10% (as specified by BIR):
- Total dutiable value = 500 units × ₱1,500,000 = ₱750,000,000
- Excise tax = ₱750,000,000 × 10% = ₱75,000,000
2026 Excise Tax Rates (Key Categories)
The following rates are effective as of 2026, subject to annual adjustment under TRAIN and CREATE provisions:
- Petroleum (TRAIN terminal rates, in force since January 1, 2020): Gasoline ₱10.00 per liter and diesel ₱6.00 per liter (specific tax), per NIRC § 148 as amended by RA 10963.
- Cigarettes: a unitary specific tax per pack of 20 sticks under the Sin Tax laws (RA 11346 and RA 11467); the old ad valorem component no longer applies. The per-pack rate is indexed upward each year, so confirm the current peso amount in the latest BIR RMC before computing.
- Distilled spirits, beer/fermented liquor, and wine: specific taxes per liter (plus, for spirits, an ad valorem on net retail price), indexed annually under RA 11467. Because these change every January, confirm the exact current rate in the latest BIR RMC.
- Automobiles: graduated ad valorem on net manufacturer's/importer's selling price (NIRC § 149, as amended).
Alcohol and tobacco specific rates are adjusted every year for inflation, so the BIR Revenue Memorandum Circulars (RMCs) and the BIR website (www.bir.gov.ph) are the authoritative source for the exact current-year peso amounts.
Filing Requirements
Excise tax is filed and paid on a monthly basis via the Electronic BIR Filing and Payment System (eBIR/eFPS). The deadline is the 20th day of the month following the month of sale or importation.
Forms and Procedures
- BIR Form 2000-ET (Excise Tax Return): Filed monthly by manufacturers and importers of excisable goods. The form reports quantity sold/imported, applicable tax rate, and total excise tax due.
- Filing Method: Electronic filing via eBIR (www.ebir.bir.gov.ph) is mandatory for all registered excise taxpayers. Manual filing is no longer accepted.
- Payment Method: Payment is made via eFPS (Electronic Facility for Payment System) or authorized banks (BDO, BPI, Metrobank, etc.). Payment must be made by the 20th of the following month.
- Supporting Documents: Manufacturers must maintain sales invoices, production records, and import documents (for importers) as proof of excisable goods sold or imported.
Registration and Compliance
All manufacturers and importers of excisable goods must register with the BIR and obtain an Excise Tax Identification Number (ETIN). Registration is done via BIR Form 1905 (Application for Registration) at the taxpayer's Regional District Office (RDO). Once registered, taxpayers are required to:
- File monthly excise tax returns even if no sales occurred (zero return).
- Maintain detailed records of production, sales, and imports for at least three years.
- Comply with BIR audit and inspection requirements.
Exemptions & Special Cases
Certain goods and transactions are exempt from excise tax under NIRC §132 and related provisions:
- Alcohol for medicinal/industrial use: Denatured alcohol used in manufacturing is exempt if properly documented.
- Exports: Excisable goods exported outside the Philippines are exempt from excise tax (NIRC §132(a)).
- Government purchases: Goods purchased by the national government for official use may qualify for exemption under specific conditions.
- Fuel for power generation: Diesel and other fuels used by power plants for electricity generation may qualify for reduced rates under certain circumstances (subject to BIR ruling).
- Vehicles for persons with disabilities: Automobiles for PWDs may qualify for exemption or reduced rates under RA 9211 and related laws.
Exemptions must be claimed with supporting documentation and BIR approval. The burden of proof rests with the taxpayer.
Penalties for Non-Compliance
Failure to file excise tax returns or pay excise tax on time incurs penalties under NIRC §248 and §249 (as amended by TRAIN):
- Late payment surcharge: 25% of the unpaid excise tax (NIRC §248).
- Interest on unpaid tax: 12% per annum, compounded monthly, from the due date until full payment (NIRC §249, as amended by RA 10963).
- Late filing penalty: If a return is filed late but payment is made on time, a 10% surcharge applies (NIRC §248).
- Fraud/evasion: Deliberate underreporting or non-filing of excise tax may result in criminal prosecution, fines up to ₱1,000,000, and imprisonment up to 10 years (NIRC §269).
- Administrative penalties: BIR may issue a Notice of Deficiency Assessment (NDA) and assess additional tax, surcharge, and interest. Taxpayers have 30 days to respond.
Penalties are cumulative and compound. Prompt payment and accurate filing are essential to avoid escalating liabilities.
Recent Changes (TRAIN & CREATE)
The TRAIN Law (RA 10963, effective January 1, 2018) and CREATE Law (RA 11534, effective July 1, 2020) introduced significant changes to excise tax:
- Annual rate adjustments: Excise tax rates on alcohol and tobacco are adjusted annually based on inflation (Consumer Price Index). Rates are published via BIR RMCs.
- Increased rates on sin goods: Rates on distilled spirits, beer, and cigarettes were increased to fund health and infrastructure programs.
- Fuel tax adjustments: Excise tax on petroleum products was adjusted to balance revenue and economic impact.
- Simplified filing: eBIR filing requirements were streamlined to reduce compliance burden.
Key Takeaways
Excise tax is a critical indirect tax on sin goods in the Philippines. Manufacturers and importers must file monthly returns via eBIR by the 20th of the following month, using either specific or ad valorem rates depending on the product. Accurate calculation, timely filing, and proper documentation are essential to avoid penalties. Taxpayers should monitor BIR RMCs for annual rate adjustments and consult with a tax professional for complex transactions or exemption claims.
BIR Form 2000-ET (Excise Tax Return) — filed monthly by manufacturers and importers of excisable goods
20th day of the month following the month of sale or importation
Need a Calculation?
Use our BIR-compliant calculator to compute your excise tax instantly.
Who Pays Excise Tax?
check_circleMandatory for:
Manufacturers, producers, and importers of excisable goods — alcohol, tobacco, petroleum products, automobiles, minerals, and other goods listed in NIRC Title VI. The tax attaches at the point of manufacture or importation (NIRC § 130-131); importers are treated as manufacturers for excise purposes.
infoVoluntary for:
Manufacturers may apply for tax credits or refunds on excise paid on goods that are later exported or used as raw materials for exported products, subject to BIR documentation rules.
cancelExempt:
Excisable goods actually exported (NIRC § 135); denatured alcohol for industrial use; petroleum sold to international carriers and exempt entities; and other transactions specifically relieved under NIRC Title VI and special laws.
Worked Examples
Maria manufactures 5,000 cases of distilled spirits (1 liter bottle per case). Distilled spirits carry a specific per-liter tax (plus an ad valorem on net retail price) that is indexed annually under RA 11467; use the current rate from the latest BIR RMC (shown here as an illustrative ₱S per liter for the specific component).
Computation
Total volume = 5,000 cases × 1 liter = 5,000 liters Specific excise = 5,000 liters × the current specific per-liter rate (₱S), then add the ad valorem on net retail price
Result
Maria files BIR Form 2000-ET reporting the excise tax due. Payment is made via eFPS by the 20th of the following month. Confirm the current specific and ad valorem rates in the latest BIR RMC.
Juan imports 1,000 cartons of cigarettes (20 sticks per pack, 10 packs per carton). Cigarettes carry a unitary specific tax per pack under the Sin Tax laws (RA 11346 and RA 11467) — the old ad valorem component no longer applies. Use the current per-pack rate from the latest BIR RMC (shown here as an illustrative ₱R per pack).
Computation
Total packs = 1,000 cartons × 10 packs = 10,000 packs Excise tax = 10,000 packs × the current specific per-pack rate (₱R)
Result
Juan files BIR Form 2000-ET reporting the specific excise tax due on 10,000 packs. Payment is due by the 20th of the following month. Confirm the exact per-pack peso rate in the current BIR RMC, since it is indexed upward each year.
Pedro imports 200 units of automobiles with a dutiable value of ₱2,000,000 per unit. The ad valorem excise tax rate is 10%.
Computation
Total dutiable value = 200 units × ₱2,000,000 = ₱400,000,000 Excise tax = ₱400,000,000 × 10% = ₱40,000,000
Result
Pedro files BIR Form 2000-ET reporting ₱40,000,000 excise tax. Payment is made via eFPS by the 20th of the following month.
Rosa imports 50,000 liters of gasoline. The petroleum excise rate on gasoline has been ₱10.00 per liter since January 1, 2020 (TRAIN terminal rate, NIRC § 148 as amended by RA 10963).
Computation
Excise tax = 50,000 liters × ₱10.00/liter = ₱500,000
Result
Rosa files BIR Form 2000-ET reporting ₱500,000 excise tax due. Payment is made by the 20th of the following month.
Antonio manufactures beer and sells a large volume in March. He fails to file the excise tax return by April 20. Assume the specific excise tax due on that volume is ₱2,500,000 (the per-liter beer rate is indexed annually under RA 11467 — confirm the current figure in the latest BIR RMC).
Computation
Unpaid excise tax = ₱2,500,000 Late payment surcharge (25%) = ₱2,500,000 × 25% = ₱625,000 Interest (12% per annum, 1 month) = ₱2,500,000 × 12% ÷ 12 = ₱25,000 Total liability = ₱2,500,000 + ₱625,000 + ₱25,000 = ₱3,150,000
Result
Antonio receives a Notice of Deficiency Assessment (NDA) for ₱3,150,000. He has 30 days to respond or appeal.
Common Mistakes to Avoid
errorUnderreporting quantity of goods sold or imported on the excise tax return.
Penalty: BIR audit and assessment of additional tax, 25% surcharge, and 12% annual interest. Criminal prosecution possible if fraud is proven.
How to Avoid: Maintain detailed production and sales records. Cross-reference invoices, warehouse receipts, and shipping documents. File accurate returns based on actual sales/imports.
errorMissing the monthly filing deadline (20th of the following month) and paying late.
Penalty: 25% surcharge on unpaid excise tax plus 12% annual interest, compounded monthly. Penalties accumulate quickly.
How to Avoid: Set calendar reminders for the 20th of each month. Use eBIR to file and eFPS to pay on time. Maintain a compliance checklist.
errorFailing to register as an excise taxpayer before manufacturing or importing excisable goods.
Penalty: BIR may assess excise tax retroactively with surcharge and interest. Business operations may be suspended.
How to Avoid: Register with the BIR via BIR Form 1905 at your RDO before commencing operations. Obtain an Excise Tax Identification Number (ETIN).
errorConfusing specific tax and ad valorem tax rates and applying the wrong rate to products.
Penalty: Underpayment of excise tax, leading to deficiency assessment, surcharge, and interest.
How to Avoid: Verify current rates via BIR RMCs and the BIR website. Consult a tax professional if unsure. Maintain a rate reference table for all products.
errorNot maintaining supporting documents (invoices, production records, import papers) for at least three years.
Penalty: BIR may disallow deductions or assess additional tax based on estimated sales. Penalties apply.
How to Avoid: Implement a document management system. Store invoices, warehouse receipts, and shipping documents for at least three years. Conduct annual audits.
Tax Optimization Strategies
lightbulbMonitor annual excise tax rate adjustments published via BIR RMCs. Plan production and pricing strategies in advance to absorb rate increases and maintain competitiveness.
Potential Savings: ₱500,000–₱5,000,000 annually (depending on volume) by optimizing production timing and pricing before rate increases take effect.
lightbulbClaim exemptions for exported excisable goods (NIRC §132(a)). If you export, file for exemption with supporting export documents (Bill of Lading, commercial invoices).
Potential Savings: 100% excise tax savings on exported goods. For a manufacturer exporting ₱50,000,000 in goods, savings could reach ₱5,000,000–₱10,000,000 annually.
lightbulbMaintain detailed records of denatured alcohol or fuel used for industrial purposes. Claim exemptions for non-taxable uses with BIR approval.
Potential Savings: ₱200,000–₱2,000,000 annually, depending on volume of exempt goods.
lightbulbConsolidate purchases and imports to optimize logistics and reduce administrative burden. Batch filings can improve accuracy and reduce compliance costs.
Potential Savings: ₱50,000–₱500,000 annually in reduced compliance and audit costs.
lightbulbEngage a tax professional to conduct annual excise tax compliance reviews. Proactive audits can identify and correct errors before BIR assessments.
Potential Savings: ₱100,000–₱1,000,000 annually by avoiding penalties and interest on corrected underpayments.
Related Resources
Related Calculators
Related Tax Types
Glossary Terms
Frequently Asked Questions
Specific tax is a fixed amount per unit (for example, a peso rate per liter on alcohol or per pack on cigarettes, indexed annually under RA 11467), while ad valorem tax is a percentage of the selling price or dutiable value (for example, the graduated ad valorem on automobiles under NIRC § 149). Some products, like distilled spirits, combine a specific per-liter tax with an ad valorem on net retail price; cigarettes, by contrast, now carry a unitary specific tax only, with no ad valorem component (NIRC § 131; RA 11346 and RA 11467).
Excise tax is due monthly by the 20th of the month following the month of sale or importation. It is filed via eBIR Form 2000-ET and paid via eFPS or authorized banks (BDO, BPI, Metrobank, etc.) (BIR RMC 2023-001).
No. Excisable goods exported outside the Philippines are exempt from excise tax under NIRC §132(a). The exporter must file for exemption with supporting export documents (Bill of Lading, commercial invoices) and BIR approval.
A 10% surcharge applies if the return is filed late but payment is made on time. If payment is also late, an additional 25% surcharge and 12% annual interest apply (NIRC §248–249).
Under TRAIN (RA 10963) and CREATE (RA 11534), excise tax rates on alcohol and tobacco are adjusted annually based on inflation (Consumer Price Index). Adjusted rates are published via BIR Revenue Memorandum Circulars (RMCs) in December for the following year.
Manufacturers and importers must maintain sales invoices, production records, import documents, warehouse receipts, and shipping documents for at least three years. These records support the accuracy of filed excise tax returns and are subject to BIR audit (NIRC §233).
Yes. If you overpaid excise tax, you can file a claim for refund or credit within two years from the date of payment (NIRC §229). File BIR Form 1118 (Application for Refund/Credit of Internal Revenue Taxes) with supporting documentation at your RDO.
Deliberate underreporting or non-filing of excise tax may result in criminal prosecution, fines up to ₱1,000,000, and imprisonment up to 10 years (NIRC §269). Civil penalties include 25% surcharge and 12% annual interest on unpaid tax.
Sources & References (5)
Primary sources and the laws, regulations, and official issuances this page relies on. Each citation links directly to the issuing authority’s document.
- LawPhil Project (Arellano Law Foundation). “NIRC Title VI (Excise Taxes) as amended by RA 10963 (TRAIN) — petroleum terminal rates.” lawphil.net. Republic Act No. 10963 (TRAIN), amending NIRC Title VI. Accessed .
- LawPhil Project (Arellano Law Foundation). “RA 11467 — sin tax reform (alcohol, heated tobacco, vapor products), indexed annual rates.” lawphil.net. Republic Act No. 11467 (2020), full enacted text. Accessed .
- LawPhil Project (Arellano Law Foundation). “RA 11346 — tobacco excise tax increase.” lawphil.net. Republic Act No. 11346 (2019), full enacted text. Accessed .
- Bureau of Internal Revenue. “BIR — Excise Tax (rates, BIR Form 2200 series, monthly filing).” bir.gov.ph. Bureau of Internal Revenue, Excise Tax information page. Accessed .
Last Updated: June 13, 2026