EXECUTIVE ORDER NO. 990
EXECUTIVE ORDER NO. 990 - ALLOWING
SALES TAX CREDITS ON RAW MATERIALS PURCHASE AGAINST QUARTERLY SALES
TAXES WITHOUT TAKING INTO ACCOUNT RAW MATERIAL, WORK-IN-PROCESS AND
FINISHED GOODS INVENTORIES
WHEREAS, the current economic crisis
amounts to a grave emergency which affects the stability of the nation
and requires immediate action;
WHEREAS, the issuance of this order is an essential and necessary
component of the national economic recovery program formulated to meet
and overcome the emergency;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines,
by virtue of the powers vested in me under Sec. 290-B of the
National Internal Revenue Code, do hereby direct and order that:
Section 1. Credits against sales tax due. — Any
specific or percentage tax paid under Titles IV and V of the National
Internal Revenue Code on domestically manufactured, processed or
produced, or imported raw material, part, accessory or other article
locally purchased or imported by the manufacturer for conversion into
or intended to form part of the finished products shall be credited
against the sale tax due on the finished product enumerated in Section s
194, 195, 196, 197, 199 (a) and 201 of the same Code: Provided,
however, that in case of total tax paid on the raw material, part,
accessory or other article exceeds the amount of the sales tax due on
the finished product, the excess shall be credited against the sales
tax liability of the manufacturer for the succeeding taxable quarter or
quarters; and, Provided, further, that the amount of tax on the raw
material, part, accessory or other article shall be indicated as a
separate item in the sales invoice; and, Provided, furthermore, that
any tax credit sold, transferred, disposed of, or, for any other
reason, can no longer be used in the manufacture of the finished
product, shall either be deducted from any unused tax credit or paid as
a part of the tax due in the quarter following the disposal.
Sec. 2. Transitory provisions. — All accumulated
tax credits accruing on inventories of raw materials, work-in-process
and finished goods as of the end of taxable quarter which commenced
after December 31, 1984 shall be applied in four equal installments
against the quarterly sales tax for the four quarters immediately
following the effectivity of this Executive Order.
Sec. 3. Uniformity of methods of recording sales
tax credits and tax liability. — The Minister of Finance, upon
recommendation of the Commissioner of Internal Revenue, shall
promulgate rules and regulations prescribing uniform system of
accounting and method of recording sales tax liability of manufactures
and sales tax credits representing specific and sales tax shifted and
separately billed in sales invoices by dealers, importers, manufactures
or producers.
Sec. 4. Effectivity. — This Order shall take
effect on sales for taxable quarters beginning after December 31, 1984.
DONE in the City of Manila,
this 10th day October, in the year of Our Lord, nineteen hundred and
eighty-four.