THE Bureau of Internal Revenue (BIR) issued on Thursday four revenue regulations to implement parts of the Tax Reform for Acceleration and Inclusion (TRAIN) law.

Finance Secretary Carlos G. Dominguez III signed on Jan. 11 Revenue Regulations (RR) 1, 3, 4, and 5, which covers new rules for the excise tax for minerals, tobacco, documentary stamp taxes, and the excise tax on automobiles, respectively.

RR 1-2018 states that coal produced under Coal Operating Contracts entered into by the government pursuant to Presidential Decree No. 972 as well as those exempted from excise tax on mineral products under other laws shall now be subject to the applicable rates above beginning Jan. 1, 2018.

This year, coal is charged a P50 excise tax per metric ton, before increasing to P100 in 2019, and P150 starting 2020.

Meanwhile, metallic and nonmetallic minerals and quarry resources extracted domestically shall be taxed at 4% based on the actual market value of the gross output at the time of removal. The rate is double the 2% in the previous tax code.

Imports will also be taxed at 4% based on the assessment of the Bureau of Customs as it determines tariff and customs duties net of excise tax and value-added tax. The rate also doubles the previous 2% rate.

Domestically extracted petroleum shall be taxed at 6% of the fair international market value on the first taxable sale. The rate rises from 3% previously.

RR 2-2018, which covers the new petroleum excise tax schedule, has yet to be signed by the Finance department.

RR 3-2018 meanwhile states that cigarettes packed either by hand or machine shall be levied P32.50 starting this year, P35 on July 1, 2018, P37.50 starting 2020, and P40 starting 2022.

RR 4-2018 increased the rates of the documentary stamp tax (DST) on the original issue of shares to P2 on each P200, or every fractional part thereof, of the par value of such shares of stock. The previous charge was P1.

The regulation also raised the respective DSTs on sales, certificates of profit, bank checks, debt instruments, acceptance bills of exchange, foreign bills of exchange, life insurance policies, policies on annuities and pre-need plans, certificates, warehouse receipts, tickets on authorized numbers games, bills of lading, proxies, powers of attorney, leases and other hiring agreements, mortgages, deeds of sale and charter parties.

RR-5 2018 states that vehicles with a net price less than P600,000 are subject to an excise tax of 4%, up  from 2% previously. The rate is 10% for those priced between P600,000 and P1 million, from 20% previously.

Vehicles with a net price of over P1 million but below P4 million will be taxed at 20%, down from the previous 40% rate for the price bracket between P1.1 million and P2.1 million. Vehicles priced over P4 million will be levied 50%, compared with the previous rate of 60% for vehicles worth more than P2.1 million.

Hybrid vehicles will only be taxed at half of the applicable excise rates within each price bracket, while purely electric vehicles shall be exempt, as are pick-ups.

BIR Commissioner Caesar R. Dulay said earlier that stakeholders should implement the adjusted rates provided by the TRAIN law event without the issuance of the respective revenue regulations.

Mr. Dulay said that he targets all regulations to be out by end-January.

Among those IRRs that have yet to be released include those covering the value-added tax, estate and donors taxes, excise taxes on cosmetic procedures, and the excise tax on sugar-sweetened beverages. — Elijah Joseph C. Tubayan

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