Rainier Allan Ronda

MANILA, Philippines — The Department of Science and Technology (DOST) has allotted a funding grant of P66.5 million to an effort of the Aklan State University (ASU) and an Aklan-based shipyard to develop a modern hybrid steel trimaran cargo vessel that can also run on wave energy.

The hybrid trimaran has been conceptualized by engineer Jonathan Salvador, owner of the Metallica Shipyard in New Washington, Aklan, where the vessel will be designed and built starting this April.

The effort will also include the Maritime Industry Authority (MARINA) as a partner, ensuring that the trimaran will be compliant to international safety and emission standards.

The construction of the hybrid craft will improve our country’s maritime industry as it is projected to be a modern design, environment-friendly, safe and unsinkable.  


 Donna Eliza Z. Leonardo

Excise tax on sweetened beverages (SBs) is one of the new taxes imposed under Republic Act (RA) 10963 or Tax Reform for Acceleration and Inclusion (TRAIN) Law which took effect last Jan. 1. The Department of Finance (DOF) along with Department of Health (DOH) support this as part of a comprehensive health measure to curb the consumption of SBs and address the worsening number of diabetes and obesity cases in the country, while raising revenue for complementary health programs that address these problems.

SBs, as defined under the TRAIN Law, are non-alcoholic beverages of any constitution (liquid, powder, or concentrated) that are pre-packaged and sealed in accordance with the Food and Drug Association (FDA) standards that contain caloric and/or non-caloric sweeteners added by the manufacturers. Simply, these are beverages that contain high level of certain sugars that are viewed to provide unnecessary or empty calories with little or no nutrition.

Unfortunately, the following drinks that we’ve come to love are now taxed under Section 47 of the TRAIN Law: sweetened juice drinks and tea; all carbonated beverages (e.g. soft drinks, etc.); flavored water; energy and sports drinks; cereal and grain beverages; other powdered drinks not classified as milk, juice, tea and coffee; and other non-alcoholic beverages that contain added sugar.

On a positive note, products that use purely coconut sap sugar and purely steviol glycosides (stevia leaves extract) are exempt from the excise tax on SB. The law also excludes from the scope of excise tax all milk products, 100 percent natural fruit and vegetable juices that do not have added sugar or caloric sweetener, meal replacement and medically indicated beverages, and ground, instant soluble and pre-packaged powdered coffees (including 3-in-1).

Now, let’s take a look at its effect on prices. SBs are to be levied at P6 or P12 per liter of volume capacity depending on the type of added sweetener. SBs using purely caloric sweeteners, purely non-caloric sweeteners or mix of both are subject to P6 excise tax per liter of volume of capacity. On the other hand, P12 per liter of volume capacity shall be imposed on SBs using purely high fructose corn syrup (HFCS) or in combination with caloric or non-caloric sweetener.

Who, when and how to pay for the excise tax?

Excise taxes are imposed on manufacturers, importers or persons in possession of the sweetened beverages before its withdrawal from the place of manufacture.

Revenue Memorandum Circular (RMC) 4-2018 provides transition procedures pending the availability of the enhanced excise tax forms in the electronic filing and payment system (eFPS). The said RMC introduced BIR Form 2200-S (Excise Tax Return for Sweetened Beverages). Electronic filers are advised to download the said form from the BIR website, fill it out, file and pay manually via over-the-counter of Authorized Agent Banks (AABs) under the jurisdiction of the concerned Revenue District Office (RDO) where the head office of the local sweetened beverage manufacturer is duly registered.

Further, a tax memorandum dated Jan. 5, advised that attachment “Liquidation of Excise Tax Deposit and Application with summary of transactions of Excise Tax Removal Declaration” shall be sent to This email address is being protected from spambots. You need JavaScript enabled to view it. through an e-mail.

Other pertinent provisions

Section 47 (E), (F) and (G) of the TRAIN Law also mandates other government offices to ensure that the objective of the law will be properly implemented. Starting June 1, the FDA shall require all manufacturers and importers to properly indicate on the label the type of sweetener used; and for sweetened beverages in powder form, the equivalent of each serving per liter of volume capacity. Likewise, the FDA is also tasked to conduct post marketing surveillance of the sweetened beverages on display in supermarkets, groceries or retail stores, and/or to inspect manufacturing sites to determine compliance with the requirements of this section.

It shall be the duty of the commissioner of internal revenue to prescribe a materially unique, secure and non-removable identification, such as codes, stamps, or other markings, to be firmly and conspicuously affixed on and form part of the label of all excisable sweetened beverages. Every year, DOH, DOF, and Department of Science and Technology (DOST) shall review the impact of the provisions on its health objectives with the view of making recommendations on the tax rate on these beverages in the future.

What to expect?

Affected taxpayers, which are mostly the large beverage manufacturing companies, may have concerns regarding the administrative aspect of this section.

Beverage-manufacturing companies are directly affected by these SBs tax being imposed. Their manufacturing processes may be complex like in the case when there are subcontracting agreements for bottling with other entities. Please note that the point for the payment of excise tax would be before the date of release from the manufacturing facility. In this kind of scenario, the manufacturer will have to transfer the beverage to the facility of the bottler who is subcontracted to put the beverage in a closed container (i.e. bottles or cans). As it is, the question whether when it should be taxed, before transport to bottling facility or before the release of the finished product from the bottling factory, may arise.

Further, if SBs are to be exported, will it be taxable to this excise taxes? As a general rule, excise tax is applicable on goods manufactured or produced in the Philippines for domestic sale or consumption or for any other disposition, and on goods imported. Hence, SBs that are for exportation may be exempt from such excise tax. However, the BIR may still impose documentary and other requirements for the monitoring of these goods to be exported.

With these questions at hand, it is imperative for the BIR to expedite the issuance of the related revenue regulations. It is undeniable that the imposition of excise tax on sweetened beverages had opened different venues for argument, health and economic wise. Only time can judge whether it is a sweet success on the part of the government.

Donna Eliza Z. Leonardo is an associate from the tax group of KPMG R.G. Manabat & Co. (KPMG RGM&Co.), the Philippine member firm of KPMG International. KPMG RGM&Co. has been recognized as a Tier 1 tax practice, Tier 1 transfer pricing practice, Tier 1 leading tax transactional firm and the 2016 National Transfer Pricing Firm of the Year in the Philippines by the International Tax Review.

This article is for general information purposes only and should not be considered as professional advice to a specific issue or entity.

The Philippine Economic Zone Authority (PEZA) will soon launch a new type of ecozone concept envisioned as mini Silicon Valleys to be hosted by state universities and colleges.

To be called Knowledge, Innovation,  Science & Technology (KIST) parks, these ecozones will become future sites of knowledge-based industries such as information technology and business processing.

Charito Plaza, PEZA director-general, said KIST will transform existing campus IT parks into KIST parks to create more value adding for the country’s higher education institutions.

The concept  is one of the new types of ecozones that PEZA will be launching soon .

This initiative is in partnership with the Department of Science and Technology and the  academe.

PEZA has initially tapped the Philippine Association of State Universities and Colleges (PASUC) and the University of the Philippines (UP) to provide pilot areas mostly idle lands within their campuses that can be developed as model KIST parks.

Recognizing the success of the Ayala Technohub in UP Diliman as a premier IT park under PEZA, Plaza is gearing up to build on this public-private partnership by creating more IT parks in the universities and colleges all over the country to serve as viable locations for leading IT-BPO companies.

Given the schools’ steady supply of talents, quality of educational infrastructure and strong scientific-technological culture, PEZA hopes to transform these campus IT parks ultimately into KIST parks.

In a recent consultation meeting with PASUC and UP, Plaza has challenged the schools’ top executives to venture into ecozone development to be able to attract scientists and venture capitalists into innovation and technology as well as to promote the establishment of more knowledge process outsourcing hubs and research and development centers through the KIST parks.

PEZA sees this strategy as feasible taking into account the country’s highly educated and English-speaking workforce and the large pool of competent college/university professors and students that can provide intellectual capital to locator industries in KIST parks.

PEZA sees the same vibrant academe-industry collaboration in the Biopolis of Singapore, Science & Technology parks of Korea and Education City of Qatar—as among the international models of S&T parks that PEZA has studied to complement DOST’s KIST framework.

Akin to an S&T park, PEZA version of a KIST park pertains to a “center of excellence or a kind of space where productive activity is done by collaborating government, academics, community and business”. (ScienceDirect). 

PEZA is thus expanding the eligible activities or projects that may be hosted by KIST park developers. 

Apart from the conventional IT-enabled activities, companies into technology, innovation and R&D may register with PEZA as locators in the KIST parks and where their pioneering products/services and innovative solutions may cater to both export and domestic markets. 

The academe may also partner with the industry particularly in putting up a research institute and incubation facility where its scientific studies or technology patent can be offered to venture capitalists for commercial development and production. The KIST parks may be immediately rolled out in public and private institutions with high academic standards and strong research facilities in the fields of biotech, food and nutrition, agro-engineering, electronics, robotics, renewable energy, transport solutions, data analytics, etc.

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