PRESCRIBING THE MANNER OF COMPUTING THE INCREMENTAL REVENUE TO BE USED AS BASIS OF THE FIFTEEN PERCENT (15%) SHARE OF THE BENEFICIARY PROVINCES PRODUCING BURLEY AND NATIVE TOBAC…

Section 8 of Republic Act (R.A.) No. 8240 which took effect on
January 1, 1997, provides that 15% of the incremental revenue collected
from the excise tax on tobacco products shall be allocated and divided
among the provinces producing burley and native tobacco in accordance
with the volume of tobacco leaf produced, to be exclusively utilized for
programs in pursuit of the objectives enumerated in the said Act. In
the absence of the corresponding rules and regulations governing the
determination of what constitutes “incremental revenue”, the above
legislative requirement covered under the said Act could not be
implemented. In accordance with the position taken by the legislative
bod y, thru the Congressional Oversight Committee on Comprehensive Tax
Reform Program, based on the minutes of deliberations by the Congress of
the Philippines on the said Act, these revenue regulations are,
therefore, prepared and issued to finally implement the said
“incremental revenue” provisions.

SECTION 1. Scope – Pursuant to the provisions of Section
244, in relation to Section 245 of the National Internal Revenue Code
(NIRC) of 1997, as amended, these Regulations are hereby promulgated in
order to prescribe the manner of computing the incremental revenue from
excise tax on tobacco products to be used as basis of the 15% allocable
share of the beneficiary provinces producing burley and native tobacco
in the excise tax collection from tobacco products pursuant to the
provisions of Section 8 of R.A. No. 8240, “An Act Amending Sections 138,
139, 140 and 142 of the National Internal Revenue Code, as Amended, and
for Other Purposes”.

SECTION 2. Manner of Computing the Incremental Revenue –
The amount of incremental revenue collected from the excise tax on
tobacco products, for purposes of determining the 15% allocable share of
beneficiary provinces producing burley and native tobacco, shall be
equivalent to the excess of the actual collection of excise taxes from
tobacco products for the year under consideration over the calendar year
1996 as the base year, net of the incremental revenue collected from
the increase in excise tax rate under R.A. No. 9334.

SECTION 3. Repealing Clause – The provisions of any
revenue regulations, rulings, or any other issuances in consistent with
these Regulations are hereby repealed, a mended, or modified
accordingly.

SECTION 4. Effectivity Clause – These Regulations shall take effect after fifteen (15) days following publication in any newspaper of general circulation.

Adopted: 21 Nov. 2008

(SGD.) MARGARITO B. TEVES
Secretary of Finance

Recommending Approval:

(SGD.) SIXTO S. ESQUIVIAS IV
Commissioner of Internal Revenue