Have you ever thought that your favorite softdrinks or iced tea carry more than just sugar?
Behind every bottle of soda, iced tea, or powdered juice is a hidden cost that can hit manufacturers, importers, and even retailers who aren’t careful — the Sweetened Beverages Excise Tax.
This tax, created under the TRAIN Law (RA 10963) and implemented by BIR Revenue Regulations No. 20-2018, is not optional. If you’re in the beverage business, understanding how it works can mean the difference between running smoothly and facing penalties or even seizure of your stock.
What Are Sweetened Beverages?
The law is clear: if your product has added sugar or sweeteners, it’s likely covered.
Drinks subject to excise tax include:
- Juice drinks with added sugar
- Sweetened tea
- Carbonated drinks (softdrinks)
- Flavored water
- Energy and sports drinks
- Powdered mixes (juice, cereals, and other instant beverages)
- Other non-alcoholic drinks with added sugar
Think about it: the iced tea mix you sell at your café, or the sports drink you import for distribution — these all fall under excise tax.
Tax Rates You Need to Know
The rates are straightforward but critical:
- ₱6.00 per liter → if the drink uses sugar or artificial sweeteners.
- ₱12.00 per liter → if it uses High Fructose Corn Syrup (HFCS).
- Exempt → if sweetened with coconut sap sugar or stevia.
Example: A 1-liter bottle of soda made with HFCS → ₱12 tax on top of costs.
What Drinks Are Not Covered?
Not all beverages are taxed. These are not subject to excise tax:
- Milk and milk products (fresh, powdered, or flavored)
- 100% natural fruit juices
- 100% natural vegetable juices
- Coffee (ground, instant, or 3-in-1)
- Medical and meal replacement drinks
If you’re in dairy, coffee, or natural juice — you’re safe.
Who Needs to Pay Excise Tax?
- Local manufacturers of sweetened beverages
- Importers of finished products or raw materials
- Anyone caught with untaxed beverages
If you’re a sari-sari store owner, you’re not the one filing excise tax — but if your supplier skipped it, you can still be penalized if stock is untaxed.
How to File and Pay
The process isn’t optional. Here’s what compliance looks like:
- File BIR Form 2200-S (Excise Tax Return for Sweetened Beverages).
- File separately for each factory or place of production.
- Pay the tax before release or removal of goods.
- Importers → secure an ATRIG (Authority to Release Imported Goods) before Customs clearance.
What the BIR Checks
The Bureau of Internal Revenue doesn’t just rely on your word. They will check:
- Official Register Books (ORB) → records of daily production and removals.
- Sworn Statements → filed every June and December, declaring brand, wholesale price, SRP, and type of sweetener.
- Labels → must show the type of sweetener used.
- Powdered mixes → must state how many liters per pack.
If your label says “naturally sweetened” without naming the sweetener → you’re already at risk.
Penalties for Non-Compliance
The costs of ignoring excise tax are steep:
- 25% surcharge + interest for late filing
- 50% surcharge or business closure for wrong declarations
- Non-citizens → deportation after serving penalties
In short, one mistake can cost more than the tax itself.
Why Compliance Matters
When you comply, you gain peace of mind:
- No penalties or seizures
- Smooth BIR and Customs transactions
- Trusted by customers and suppliers
Compliance is not just about avoiding punishment — it’s about keeping your business legitimate and trustworthy.
Protect Your Business
Don’t wait for penalties to pile up.
Download our Tax Savings Starter Guide — free for professionals and small business owners.
Sources
- BIR Revenue Regulations No. 20-2018 (Sweetened Beverages Excise Tax)
- BIR Form 2200-S (Jan 2018 ENCS) – Excise Tax Return for Sweetened Beverages
- Republic Act 10963 (TRAIN Law) – Provisions on excise tax
