REVENUE MEMORANDUM CIRCULAR NO. 20-2023 issued on February 8, 2023 clarifies the provision of Section 5 of Revenue Memorandum Circular (RMC) No. 63-2022 pertaining to the correct tax base in computing the Excise Tax on the importation of automobiles for resale pursuant to Section 149 of the Tax Code of 1997, as amended.

        “Based on the above provisions, there are three (3) primary taxable bases
         in applying the Excise Tax rates for automobiles, namely:

         1. Declared manufacturer’s or importer’s selling price, net of Excise and ValueAdded Taxes;
         2. Based on the 80% actual dealer’s price, net of Excise and Value-Added Taxes; and
         3. Based on the total cost of importation and expenses divided by 90%.”

The Circular clarifies that the 3rd taxable base provided in number 3 above shall only apply in cases where the net importer’s selling price is lower than the cost of importation and expenses as defined in the said RMC.