EXECUTIVE ORDER NO. 273
EXECUTIVE ORDER NO. 273 - ADOPTING
A VALUE-ADDED TAX, AMENDING FOR THIS PURPOSE CERTAIN PROVISIONS OF THE
NATIONAL INTERNAL REVENUE CODE, AND FOR OTHER PURPOSES
WHEREAS,
there is a need to rationalize the present system of taxing goods and
services by imposing a multi-stage value-added tax to replace the tax
on original and subsequent sales tax and percentage tax or certain
services;
WHEREAS, the adoption of value-added tax is one of the structural
reforms provided in the 1986 Tax Reform Program which is designed to
simplify tax administration and make the tax system more equitable; and
WHEREAS, it is also necessary to amend, revise and renumber the
provisions of the National Internal Revenue Code and to transfer the
collection of certain taxes as a consequence of these and previous
amendments in order to strengthen and improve tax administration and
facilitate compliance thereof;
NOW, THEREFORE, I, CORAZON C. AQUINO, President of the Philippines, do
hereby order:
Section 1. The provisions of Title IV governing
excise taxes are hereby transferred to Title VI and replaced with new
provisions imposing a value-added tax to read as follows:
“TITLE
VI. — VALUE-ADDED TAX
“Chapter 1. — IMPOSITION OF TAX
“Sec. 99.
Persons liable. — Any person who, in the course of trade or business,
sells, barters or exchanges goods, renders services, or engages in
similar transactions and any person who imports goods shall be subject
to the value-added tax (VAT) imposed in Section s 100 to 102 of this
Code.
“SEC. 100.
Value-added tax on sale of goods. — (a) Rate and base of tax. — There
shall be levied, assessed and collected on every sale, barter, or
exchange of goods, a value-added tax equivalent to 10% of the gross
selling price or gross value in money of the goods sold, bartered or
exchanged, such tax to paid by the seller or transferor: Provided, That
the following sales by VAT-registered persons shall be subject to 0%:
“(1)
export sales; and
“(2) sales to
persons or entities whose exemption under or special laws or
international agreements to which the Philippines is a signatory
effectively subjects such sales to zero rate.
“‘Export sales’ means the sale
and shipment or exportation of goods in the Philippines to a foreign
country, irrespective of any shipping arrangement that may be agreed
upon which may influence or determine the transfer of ownership of the
goods so exported, or foreign currency denominated sales. ‘Foreign
currency denominated sales’ means sales to nonresidents of goods
assembled or manufactured in the Philippines, for delivery to residents
in the Philippines and paid for in convertible foreign currency
remitted through the banking system in the Philippines.
“(b)
Transactions deemed sale. — The following
transactions shall be deemed sale:
“(1)
Transfer, use or consumption not in the course of
business of goods originally intended for sale or for use in the course
of business.
“(2)
Distribution or transfer to:
“(A)
shareholders or investors as share in the profits of
the VAT-registered person; or
“(B)
creditors in payment of debt.
“(3)
Consignment of goods if actual sale is not made
within 60 days from the date such goods were consigned.
“(4)
Retirement from or cessation of business, with respect to inventories
or taxable goods existing as of such retirement or cessation.
“(c)
Changes in or cessation of status of a
VAT-registered person. — The tax imposed in paragraph (a) in this
section shall also apply to goods disposed of or existing as of a
certain date if under circumstances to be prescribed in Regulations to
be promulgated by the Secretary of Finance, the status of a person as a
VAT-registered person changes or is terminated.
“(1)
Determination of the tax. — (1) Tax billed as a
separate item in the invoice. — If the tax is billed as a separate item
in the invoice, the tax shall be based on the gross selling price,
excluding the tax. ‘Gross selling price’ means the total amount of the
money or its equivalent which the purchasers pays or is obligated to
pay to the seller in consideration of the sale, barter or exchange of
goods, excluding the value-added tax. The excise tax, if any, on such
goods shall form part of the gross selling price.
“(2) Tax not
billed separately or is billed erroneously in the invoice. — In case
tax is not billed separately or billed erroneously in the invoice, the
tax shall be determined by multiplying the gross selling price,
including the amount intended by the seller to cover the tax or the
billed erroneously, by the factor 1/11 or such factor as may be
prescribed by regulations in case of persons partially exempt under
special laws.
“(3) Sales,
returns, allowances and sales discounts. — The value of goods sold and
subsequently returned or for which allowances were granted by a
VAT-registered person may be deducted from the gross sales or receipts
for the quarter in which a refund is made or a credit memorandum or
refund is issued. Sales discounts granted and indicated in the invoice
at the time of sale may be excluded from the gross sales within the
same quarter.
“(4)
Authority of the Commissioner to determine the appropriate tax base. —
The Commissioner shall, by regulations, determine the appropriate tax
base in cases where a transaction is deemed a sale, barter or exchange
of goods under paragraph (b) hereof, or where the gross selling price
is unreasonably lower than the actual market value.
“SEC.
101. Value-added tax on importation of goods. — (a)
In general. — There shall be levied, assessed and collected on every
importation of goods a value-added tax equivalent to 10% based on the
total value used by the Bureau of Customs in determining tariff and
customs duties, plus customs duties excise taxes, if any, and other
charges, such tax to be paid by the importer prior to the release of
such goods from customs custody: Provided, That where the customs
duties are determined on the basis of the quantity or volume of the
goods, the value-added tax shall be based on the landed cost plus
excise tax, if any.
“(b) Transfer
of goods by tax exempt persons. — In the case of tax-free importation
of goods into the Philippines by persons entities, or agencies exempt
from tax where such goods are subsequently sold, transferred or
exchanged in the Philippines to non-exempt persons or entities, the
purchasers, transferees or recipients shall be considered the importers
thereof who shall be liable for any internal revenue tax on such
importation. The tax due on such importation shall constitute a lien on
the goods superior to all charges or liens on the goods, irrespective
of the possessor thereof.
“SEC. 102.
Value-added tax on sale of services. — (a) Rate and base of tax. —
There shall be levied, assessed and collected, a value-added tax
equivalent to 10% percent of gross receipt derived by any person
engaged in the sale of services. The phrase ‘sale of services’ means of
performance of all kinds of services for others for a fee, remuneration
or consideration, including those performed or rendered by construction
and service contractors; stock, real estate, commercial, customs and
immigration brokers; lessors of personal property; lessors or
distributors of cinematographic films; persons engaged in milling,
processing , manufacturing or repacking goods for others; and similar
services, regardless of whether or not the performance thereof calls
for the exercise or use of the physical or mental faculties: Provided,
That the following services performed in the Philippines by
VAT-registered persons shall be subject to 0%.
“(1)
Processing, manufacturing or repacking goods for
other persons doing business outside the Philippines which goods are
subsequently exported, where the services are paid for in acceptable
foreign currency, inwardly remitted to the Philippines and accounted
for in accordance with the rules and regulations of the Central Bank of
the Philippines.
“(2) Services
other than those mentioned in the preceding sub-paragraph, the
consideration for which is paid for in acceptable foreign currency
which is remitted inwardly to the Philippines and accounted for in
accordance with the rules and regulations of the Central Bank of the
Philippines.
“(3) Services
rendered to persons or entities whose exemption under special laws or
international agreements to which the Philippines is a signatory
effectively subjects the supply of such services to zero rate.
“‘Gross
receipts’ means the total amount of money or its equivalent
representing the contract price, compensation of service fee, including
the amount charged for materials supplied with the services and
deposits of advance payments actually or constructively receive during
the taxable quarter for the services performed or to be performed for
another person, excluding the value-added tax.
“(b)
Determination of the tax. — (1) Tax billed as a separate item in the
invoice. — If the tax is billed as a separate item in the invoice, then
tax shall be based on the gross receipt, excluding the tax.
“(2) Tax not
billed separately or is billed erroneously in the invoice. — If the tax
is not billed separately or is billed erroneously in the invoice, the
tax shall be determined by multiplying the gross receipts (including
the amount intended to cover the tax or the tax billed erroneously) by
1/11.
“SEC.
103. Exempt Transactions. — The following shall be
exempt from the value-added tax;
“(a)
Sale of non-food agricultural, marine and forest
products in their original state by the primary producer or the owner
of the land where the same are produced.
“(b) Sale or
importation in their original state of agricultural and marine food
products; livestock and poultry of a kind generally used as, or
yielding or producing food for human consumption; and breeding stock
and genetic materials therefor.
“Products classified under this
Paragraph and paragraph (a) shall be considered in their original state
even if they undergone the simple processes of preparation or
preservation for the market, such as freezing, drying, salting, smoking
or stripping. Polished and/or husked rice, corn grits and raw cane
sugar shall be considered in their original state for purposes of this
paragraph.
“(c) Sale or
importation of fertilizers, pesticides and herbicides; chemicals for
the formulation of pesticides; seeds, seedlings and fingerlings; fish,
animal and poultry feeds; and soya bean and fish meals;
“(d) Sale or
importation of petroleum products (except lubricating oil, processed
gas, grease, wax and petrolatum) subject to excise tax imposed under
Title VI;
“(e) Sale or
importation of raw materials to be used by the buyer or importer
himself in the manufacture of petroleum products (except lubricating
oil and grease) subject to excise tax;
“(f)
Printing, publication, importation or sale of books and any newspaper,
magazine, review or bulletin which appears at regular intervals with
fixed prices for subscription and sale and which is not devoted
principally to the publication of advertisements;
“(g)
Importation of passenger and/or cargo vessel of more than ten thousand
tons, whether coastwise or ocean-going, including engine and spare
parts of said vessel, to be used by the importer himself as operator
thereof;
“(h)
Importation of personal and household effects belonging to residents of
the Philippines returning from abroad and non-resident citizens coming
to settle in the Philippines: Provided, That such goods are exempt from
customs duty under the Tariff and Customs Code of the Philippines;
“(i)
Importation of professional instruments and implements, wearing
apparel, domestic animals, and personal household effects (except any
vehicle, vessel, aircraft, machinery, other goods for use in
manufacture and merchandise or any kind in commercial quantity)
belonging to persons coming to settle for the first time in the
Philippines, for their own use and not for sale, barter or exchange,
accompanying such persons, or arriving within ninety days before and
after their arrival, upon the production of evidence satisfactory to
the Commissioner of Internal Revenue, that such persons are actually
coming to settle in the Philippines and that the change of residence is
bona fide;
“(j) Services
rendered by persons subject to percentage tax under Title V;
“(k) Services
by agricultural contract growers and milling for others of palay into
rice, corn into grits or sugar cane into raw sugar;
“(l) Medical,
dental, hospital and veterinary services;
“(m)
Educational services rendered by private educational institutions, duly
accredited by the Department of Education, Culture and Sports, and
those rendered by government educational institution;
“(n) Sale by
the artist himself of his works of art, literary works, musical
compositions and similar creations, or his services performed for the
production of such works;
“(o) Services
performed as actors or actresses, talents, singers and emcees; radio
and television broadcasters, choreographers; musical, radio, movie,
television and stage directors;
“(p) Services
performed as professional athletes;
“(q) Leasing
of real property;
“(r) Services
performed in the exercise of profession or calling (except customs
brokers) subject to the occupation tax under the Local Tax Code, and
professional services performed by registered general professional
partnerships;
“(s) Services
rendered by individuals pursuant to an employer-employee relationship;
“(t) Services
rendered by regional or area headquarters established in the
Philippines by multinational corporations which act as supervisory,
communications and coordinating centers for their affiliates,
subsidiaries or branches in the Asia-Pacific Region and do not earn or
derive income from the Philippines;
“(u)
Transactions which are exempt under special laws or international
agreements to which the Philippines is a signatory;
“(v) Export
sales by persons who are not VAT-registered; and
“(w) Sales
and/or services performed by persons other than those mentioned in the
preceding paragraphs whose annual gross sales and/or receipts do not
exceed the amount prescribed in regulations to be promulgated by the
Secretary of Finance which shall not be less than P100,000 or higher
than P500,000.
“SEC.
104. Tax Credits. — (a) Creditable input tax. — Any
input tax on the
(1)
purchase or importation of goods:
“(A)
for sale or for conversion into or intended to form
part of a finished products for sale or for use in the course of
business; or sale or for use in the course of business; or
“(B) for use
as supplies in the course of business; or
“(C) for use
as materials supplied in the sale or service; or
“(D) for use
in trade or business for which deduction for depreciation is allowed
under Sec. 29(f) of this Code; and
(2)
service performed by a VAT-registered person which
shall be credited against the output tax payable by the VAT-registered
person: Provided, That in the case of domestic purchase of goods or
services, the invoice or receipt was issued therefore by a
VAT-registered person in a manner prescribed in Section 108.
“A
VAT-registered person who is also engaged in transactions not subject
to the value added tax shall be allowed tax credit as follows:
“(A)
Total input tax which can be directly attributed to
transactions subject to value-added tax; and
“(B) A
ratable portion of any input tax which cannot be directly attributed to
either activity.
“‘Input
tax’ means the value-added tax paid by a VAT-registered person in the
course of his trade or business on importation of goods or local
purchases of goods or services from a VAT-registered person. It shall
also include the transitional input tax determined in accordance with
Section 105 of this Code and other transitional input taxes as
prescribed by regulations.
“In case tax exempt products of
a pioneer enterprise registered with the BOI as of August 1, 1986 are
sold domestically to value-added tax registered person, the value-added
tax otherwise due on such products shall also be considered as input
tax creditable against his output tax payable.
“The term ‘output tax’ means the
value-added tax due on the sale of taxable goods or services by any
person registered or required to register under Section 107 of this
Code.
“(b) Excess
output or input tax. — If at the end of any taxable quarter the output
tax exceeds the input tax, the excess shall be paid by the
VAT-registered person. If the input tax exceeds the output tax, the
excess shall be carried over to the succeeding quarter or quarters. Any
input tax attributable to the purchase of capital goods or to
zero-rated sales by a VAT-registered person may at his own option be
refunded or credited against other internal revenue taxes, subject to
the provisions of Sec. 106.
“SEC. 105.
Transitional input tax credits. — A person who becomes liable to
value-added tax or any person who elects to be a VAT-registered person
shall, subject to the filing of an inventory as prescribed by
regulations, be allowed input tax on his beginning inventory of goods,
materials and supplies equivalent to 8% of the value of such inventory
or the actual value-added tax paid on such goods, materials and
supplies, whichever is higher, which shall be credible against the
output tax.
“SEC. 106.
Refunds or tax credits of input tax. — (a) Export Sales. — An exporter
who is a VAT-registered person may, within two years from the date of
exportation, apply for the issuance of a tax credit certificate or
refund of the input tax attributable to the goods exported, to the
extent that such input tax has been applied to output tax and upon
presentation of proof that the foreign exchange proceeds has been
accounted for in accordance with the regulations of the Central Bank of
the Philippines.
“(b)
Zero-rated or effectively zero-rated sales. — Any person, except those
covered by paragraph (a) above, whose sales are zero-rated or are
effectively zero-rated may, within two years after the close of the
quarter when such sales were made, apply for the issuance of a tax
credit certificate or refund of the input taxes attributable to such
sales to the extent that such input tax has not been applied against
output tax.
“(c) Capital
goods. — A VAT-registered person may apply for the issuance of the tax
credit certificate or refund of input taxes paid on capital goods
imported or locally purchased, to the extent that such input tax has
not been applied against output taxes. The application for refund may
be made only after the expiration of two succeeding quarters following
the quarter in which the importation or local purchase was made:
Provided, That a VAT- registered person who is just commencing business
may apply for refund of input taxes under this paragraph not earlier
than 180 days from the date of registration or actual start of business
operations, whichever comes later: Provided, however, That the
application is filed not later than two (2) years from the date herein
prescribed.
“(d)
Cancellation of VAT registration. — A person whose registration has
been cancelled due to retirement from or cessation of business, or due
to changes in or cessation of status under Section 100 (c) of this Code
may, within 2 years form the date of cancellation, apply for the
issuance of a tax credit certificate for any unused input tax which he
may use in payment of his other internal revenue taxes.
“(e) Period
within which refund or input taxes may be made by the Commissioner. —
The Commissioner shall refund input taxes within 60 days from the date
the application for refund was filed with him or his duty authorized
representative. No refund or input taxes shall be allowed unless the
VAT-registered person files an application for refund within the period
prescribed in paragraphs (a), (b) and (c), as the case may be.
(f) Manner of
giving refund. — Refunds shall be made upon warrants drawn by the
Commissioner or by his duly authorized representative without the
necessity of being counter-signed by the Chairman, Commission on Audit,
the provisions of the Revised Administrative Code to the contrary not
withstanding: Provided, That refunds under this paragraph shall be
subject to post audit by the Commission on Audit.
Chapter 2. — COMPLIANCE REQUIREMENTS
“SEC.
107. Registration of value-added taxpayers. — (a) In
general. — Any person subject to a value-added tax under Section s 100
and 102 of this Code shall register with the appropriate Revenue
District Officer. A person who maintains a head or a main office and
branches in different places shall register with the revenue district
office which has jurisdiction over the place where the main or head
office is located.
“(b) Persons
commencing a business. — Any person who expects to realize gross sales
or receipts subject to value-added tax in excess of the amount
prescribed by the Secretary of Finance for the next 12-month period
from the commencement of the business, shall, within 30 days before the
start of the said business, register with the Revenue District Officer
who has jurisdiction over his principal place of business.
“(c) Persons
becoming liable to value-added tax. — Any person whose gross sales or
receipts in any 12-month period exceeds the amount prescribed by
regulations for exemption from value-added tax shall register within 30
days after the end of the last month of that period, and shall be
liable to the value-added tax commencing from the first day of the
month following his registration.
“(d) Optional registration
of exempt person. — Any person whose transactions are exempt from
value-added tax under Section 103 (a), (b), (c), (f), and (w) of this
Code, may apply for registration as a VAT-registered person not later
than 10 days before the beginning of a taxable quarter.
“A VAT-registered person who is,
at the same time, engaged in activities exempted under Section 103 (a),
(b), (c), and (f) of this Code may register any or all of his exempt
activities within the same period provided for in this paragraph.
“In any case, the Commissioner
may, for administrative reasons, deny any application for registration.
“For purposes of this Title, any
person registered in accordance with the provisions of this section
shall be referred to as a ‘VAT-registered person’. Each VAT-registered
person shall be assigned only one registration number.
“(e)
Cancellation of Registration. — The registration of any person who
ceases to be liable to value-added tax shall be cancelled by the
Commissioner upon filing of an application for cancellation of
registration. Any person who opted to be registered under paragraph (d)
of this section may, under regulations of the Secretary of Finance,
apply for cancellation of such registration.
“SEC. 108.
Invoicing and accounting requirements for VAT-registered persons. — (a)
Invoicing requirements. — A VAT-registered person shall, for every
sale, issue an invoice or receipt. In addition to the information
required under Sec. 238, the following information shall be
indicated in the invoice or receipt:
“(1)
The VAT registration number.
“(2) If the
seller bills the tax as a separate item in the invoice:
“(A)
the amount of gross selling price or gross receipts
on which the value-added tax is based;
“(B) the
amount of value added tax determined by multiplying the amount of gross
selling price or gross receipts by the rate of tax; and
“(C) the sum
of (i) the gross selling price or gross receipts and (ii) the
value-added tax which the purchaser pays or is obligated to pay to the
vendor.
“(3)
If the seller elects not to bill the tax as a
separate item in the invoice or receipt, the total amount charged
against the buyer.
“(b)
Accounting requirements. — Notwithstanding the
provisions of Sec. 233, all persons subject to the value-added tax
under Section s 100 and 102 shall, in addition to the regular accounting
records required, maintain a subsidiary sales journal and subsidiary
purchase journal on which the daily sales and purchases are recorded.
The subsidiary journals shall contain such information as may be
required by the Secretary of Finance.
“SEC. 109.
Notification requirements. — (a) Change of place of business. — It
shall be the duty of every VAT-registered person to file a notice of
change of his principal place of business or any of his branches or
offices. Such notification shall be filed within 15 days from the date
of such date with the Revenue District Officers who has jurisdiction of
his former and new place of business.
“(b) Other
changes. — Any person registered in accordance with Section 107 shall
notify the Revenue District Officer of the change or termination of his
status as a VAT-registered person.
“SEC. 110.
Return and payment of value-added tax. — (a) Where to file the return
and pay the tax. — Every person subject to value-added tax shall file a
quarterly return of his gross sales or receipts and pay the tax due
thereon to a bank duly accredited by the Commissioner located in the
revenue district where such person is registered or required to be
registered. However, in due shall be paid to any duly accredited agent
banks within the city or municipality the return shall be filed and any
amount due shall be paid to any duly accredited bank within the
district, or to the Revenue District Officer, Collection Agent or duly
authorized Treasurer of the city or municipality where such taxpayer
has his principal place of business. Only one consolidated return shall
be filed by the taxpayer for all the branches and lines of business
subject to value-added tax. If no tax is payable because the amount of
input tax and any amount authorized to be offset against the output tax
is equal to or is in excess of the output tax due on the return, the
taxpayer shall file the return with the Revenue District Officer,
Collection Agent or authorized municipal treasurer where the taxpayer’s
principal place of business is located.
“(b) Time for
filing of return and payment of tax. — The return shall be filed and
the tax paid within 20 days following the end of each quarter
specifically prescribed for a VAT-registered person under regulations
to be promulgated by the Secretary of Finance: Provided, however, That
any person whose registration is cancelled in accordance with paragraph
(e) of Section 107 shall file a return within 20 days from the
cancellation of such registration.
“(c) Initial
returns. — The Commissioner may prescribe an initial taxable period for
any VAT- registered person for his first return, which in no case shall
exceed 5 months.
“SEC. 111.
Power of the Commissioner to suspend the business operations of a
taxpayer. — The Commissioner or his authorized representative is hereby
empowered to suspend the business operations and temporarily close the
business establishment of any person for any of the following
violations:
“(a)
In the case of a VAT-registered person.
“(1)
Failure to issue receipts or invoices.
“(2) Failure
to file a value-added tax return as required under Section 110.
“(3)
Understatement of taxable sales or receipts by 30% or more of his
correct taxable sales or receipt for the taxable quarter.
“(b)
Failure of any person to register as required under
Section 107.
“The temporary closure of the
establishment shall be for a duration of not less than five(5) days and
shall be lifted only upon compliance with whatever requirements
prescribed by the Commissioner in the closure order.”
Sec. 2. A new section, to be known as Section 112
of the National Internal Revenue Code, is hereby provided under Title V
imposing a percentage tax on persons exempt from a value-added tax to
read as follows:
“SEC.
112. Tax on persons exempt from value-added tax
(VAT). — Any persons whose sales or receipts are exempt under Section 103 (w) of this Code from payment of value-added tax and who is not a
VAT-registered person shall pay a tax equivalent to two (2) percent of
his gross quarterly sales or receipts.”
Sec. 3. Sec. 6 of the National Internal
Revenue Code is hereby amended to read as follows:
“SEC.
6. Agents and deputies for collection of national
internal revenue taxes. — The following are hereby constituted agents
of the Commissioner of Internal Revenue:
“(a)
The Commissioner of Customs and his subordinates
with respect to the collection of national internal revenue taxes on
imported goods;
“(b) The head
of the appropriate government office and his subordinates with respect
to the collection of energy tax; and
“(c) Banks
duly accredited by the Commissioner with respect to receipt of payments
of internal revenue taxes authorized to be made thru banks.
“Any
officer or employee of duly accredited bank assigned to receive
internal revenue tax payments and transmit tax returns or documents to
the Bureau of Internal Revenue shall be subject to the same sanctions
and penalties prescribed in Section s 268 and 269 of this Code.”
Sec. 4. Section 16 of the National Internal
Revenue Code is hereby amended to read as follows:
“SEC.
16. Power of the Commissioner to make assessment and
prescribed additional requirements for tax administration or
enforcement.
“(a)
Examination of returns and determination of tax. —
After a return is filed as required under the provisions of this Code,
the Commissioner shall examine it and assess the correct amount of tax.
The tax or deficiency tax so assessed shall be paid upon notice and
demand from the Commissioner. Any return, statement or declaration
filed in any office authorized to receive the same shall not be
withdrawn: Provided, That the same may be modified or changed by filing
an amended return, statement or declaration.
“(b) Failure
to submit required returns, statements, reports and other documents. —
When a report required by law as a basis for the assessment of any
national internal revenue tax shall not be forthcoming within the time
fixed by law or regulation or when there is reason to believe that any
such report is false, incomplete or erroneous, the Commissioner shall
assess the proper tax on the best evidence obtainable.
“In
case a person fails to file a required return or other document at the
time prescribed by law, or wilfully or otherwise files a false or
fraudulent return or other document, the Commissioner shall make or
amend the return from his own knowledge and from such information as he
can obtain through testimony or otherwise, which testimony or
otherwise, which shall be prima facie correct and sufficient for all
legal purposes.
“(c)
Authority to conduct inventory-taking, surveillance and to describe
presumptive gross sales and receipts. — The Commissioner may, at any
time during the taxable year, order an inventory-taking of goods of any
taxpayer as a basis for determining his internal revenue tax
liabilities, or may place the business operations of any person,
natural or juridical, under observation or surveillance if there is
reason to believe that such person is not declaring his correct income,
sales or receipts for internal revenue tax purposes. The findings may
be used as the basis for assessing the taxes for the other months or
quarters of the same or different taxable years and such assessment
shall be deemed prima facie correct.
“When it is found that a person
has failed to issue receipts and invoices in violation of the
requirements of Section s 108 and 238 of this Code, or when there is
reason to believe that the books of accounts or other records do not
correctly reflect the declaration made or to be made in the return
required to be filed under the provisions of this Code, the
Commissioner, after taking into account the sales, receipts, income or
other taxable base of other persons engaged in similar businesses under
similar situations or circumstances or after considering other relevant
information, may prescribe a minimum amount of such gross receipts,
sales, and taxable base and such amount so prescribed shall be prima
facie correct for purposes of determining the internal revenue tax
liabilities of such person.
“(d)
Authority to terminate taxable period. — When it shall come to the
knowledge of the Commissioner that a taxpayer is retiring from any
business subject to tax or intends to leave the Philippines, or remove
his property therefrom, or hide or conceal his property, or perform any
act tending to obstruct the proceedings for the collection of the tax
for the past or current quarter or year, or render the same totally or
partly ineffective unless such proceedings are begun immediately, the
Commissioner shall declare the tax period of such taxpayer terminated
at any time and shall send the taxpayer a notice of such decision,
together with a request for the immediate payment of the tax for the
period so declared terminated and the tax for the preceding year or
quarter or such portion thereof as may be unpaid, and said taxes shall
be due and payable immediately and shall be subject to all the
penalties hereafter prescribed, unless paid within the time fixed in
the demand made by the Commissioner.
“(e)
Authority of the Commissioner to prescribe real property values. — The
Commissioner is hereby authorized to divide the Philippines into
different zones or areas and shall, upon consultation with competent
appraisers both from the private and public sectors, determine the fair
market value of real properties located in each zone or area. For
purposes of computing any internal revenue tax, the value of the
property shall be whichever is the higher of:
“(1)
the fair market value as determined by the
Commissioner; or
“(2) the fair
market value as shown in the schedule of the values of the Provincial
and City Assessors.
“(f)
Authority of the Commissioner to inquire into bank
deposit accounts. — The provisions of Republic Act No. 1405 to the
contrary notwithstanding, the Commissioner is hereby authorized to
inquire into the bank deposits of a decedent for the purpose of
determining the gross estate of such decedent.
“In case a taxpayer offers to
compromise the payment of his tax liabilities on the ground that his
financial position demonstrates a clear inability to pay the tax
assessed, his offer shall not be considered unless he waives his
privilege under the said law and such waiver shall serve as authority
of the Commissioner to inquire into the bank deposits of said taxpayer.
“(g)
Authority to accredit and register tax agents. — The Commissioner may
require prior accreditation and registration, based on competence and
moral fitness, of persons and general professional partnerships or
their representatives in the preparations and lading of required tax
returns, statements, reports, memoranda, or in appearing or in filing
protests or papers with the Bureau for the taxpayers. For this purpose,
the Commissioner is empowered to create national and regional
accreditation boards, to designate from among the ranks of senior
officials of the Bureau, one chairman and two members in each board and
to issue the necessary rules and regulations subject to the approval of
the Secretary of Finance.
“(h)
Authority of the Commissioner to prescribe additional procedural or
documentary requirements. — The Commissioner may prescribe the manner
of compliance with any documentary or procedural requirements in
connection with the submission or preparation of financial statements
accompanying the tax returns.”
Sec. 5. Sec. 226 of the National Internal
Revenue Code is hereby renumbered and amended to read as follows:
“SEC.
122. Tax on agents of foreign insurance companies. —
Every fire, marine, or miscellaneous insurance agent authorized under
the Insurance Code to procure policies of insurance as he may have
previously been legally authorized to transact on risks located in the
Philippines for companies not authorized to transact business in the
Philippines shall pay a tax equal to twice the tax imposed in Section 121: Provided, That the provisions of this section shall not apply to
reinsurance: Provided, however, That the provisions of this section
shall not affect the right of an owner of property to apply for and
obtain for himself policies in foreign companies in cases where said
owner does not make use of the services of any agent, company or
corporation residing or doing business in the Philippines. In all cases
where owners of property obtain insurance directly with foreign
companies, it shall be the duty of said owners to report to the
Insurance Commissioner and to the Commissioner of Internal Revenue each
case where insurance has been so effected, and shall pay the tax of
five per cent on premiums paid, in the manner required by Section 121.”
Sec. 6. Section 162 of the National Internal
Revenue Code is hereby renumbered and amended to read as follows:
“SEC.
125. Returns and payment of percentage taxes. — (a)
Return of gross sales, receipts or earnings and payment of tax. —
“(1)
Persons liable to pay percentage taxes. — Every
person subject to the percentage taxes imposed under this Title shall
file a quarterly return of the amount of his gross sales, receipts, or
earnings and pay the tax due thereon within 20 days after the end of
each taxable quarter. Provided, That in the case of a person whose
VAT-registration is cancelled and who becomes liable to the tax imposed
in Section 112 of this Code, the tax shall accrue from the date of
cancellation and shall be paid in accordance with provisions of this
Section .
“(2) Person
retiring from business. — Any person retiring from a business subject
to percentage tax shall notify the nearest internal revenue officer,
file his return and pay the tax due thereon within twenty days after
closing his business.
“(3)
Exceptions. — The Commissioner may, by regulations prescribe:
“(A)
The time for filing the return at intervals other
than the time prescribed in the preceding paragraphs for a particular
class or classes of taxpayers after considering such factors as volume
of sales, financial condition, adequate measures of security; and such
other relevant information required to be submitted under the pertinent
provisions of this Code; and
“(B) The
manner and time of payment of percentage taxes other than as
hereinabove prescribed, including a scheme of tax prepayment.
“(4)
Determination of correct sales or receipts. — When
it is found that a person has failed to issue receipts or invoices, or
when no return is filed, or when there is reason to believe that the
books of accounts or other records do not correctly reflect the
declarations made or to be made in a return required to be filed under
the provisions of this Code, the Commissioner, after taking into
account the sales, receipts or other taxable base of other persons
engaged in similar business under similar situations or circumstances,
or after considering other relevant information, may prescribe a
minimum amount of such gross receipts, sales and taxable base and such
amount so prescribed shall be prima facie correct for purposes of
determining the internal revenue tax liabilities of such person.
“(b)
Where to file. — Every person liable to the
percentage tax under this Title may, at his option, file a separate
return for each branch or place of business or a consolidated return
for all branches or places of business with the Revenue District
Officer, Collection agent or duly authorized Treasurer of the City or
Municipality where said business or principal place of business is
located, as the case may be.”
Sec. 7. Section 109 of the National Internal
Revenue Code is hereby renumbered and amended to read as follows:
“SEC.
126. Goods subject to excise taxes. — Excise taxes
apply to goods manufactured or produced in the Philippines for domestic
sale or consumption or for any other disposition and to things
imported. The excise tax imposed herein shall be in addition to the
value-added tax imposed under Title IV.
“For purposes of this Title,
excise taxes herein imposed and based on weight or volume capacity or
any other physical unit of measurement shall be referred to as specific
tax and an excise tax herein imposed and based on selling price or
other specified value of the good shall be referred to as `ad valorem
tax’“
Sec. 8. Section 110 of the National Internal
Revenue Code is hereby renumbered and amended to read as follows:
“SEC.
127. Payment of excise taxes on domestic products. —
(a) Person liable; time for payment. — Unless otherwise especially
allowed, excise taxes on domestic products shall be paid by the
manufacturer or producer before removal from the place of production:
Provided, That the excise tax on locally manufactured petroleum
products and indigenous petroleum levied under Section s 145 and 151 (a)
(4), respectively, of this Title shall be paid within 15 days from the
date of removal thereof from the place of production. Should domestic
products be removed from the place of production without the payment of
the tax, the owner or person having possession thereof shall be liable
for the tax due thereon.
“(b)
Determination of gross selling price of goods subject to ad valorem
tax. — Unless otherwise provided, the price, excluding the value-added
tax, at which the goods are sold at wholesale in the place of
production or through their sales agents to the public shall constitute
the gross selling price. If the manufacturer also sells or allows such
goods to be sold at wholesale in another establishment of which he is
the owner or in the profits at which he has an interest, the wholesale
price in such establishment shall constitute the gross selling price.
Should such price be less than the cost of manufacture plus expenses
incurred until the goods are finally sold, then a proportionate margin
of profit, not less than 10% of such manufacturing cost and expenses,
shall be added to constitute the gross selling price.
“(c)
Manufacturer’s or producer’s sworn statement. — Every manufacturer or
producer of goods or products subject to excise taxes shall file with
the Commissioner on the date or dates designated by the latter and as
often as may be required, a sworn statement showing among other
information, the different goods or products manufactured or produced
and their corresponding gross selling price or market value, together
with the cost of manufacture or production plus expenses incurred or to
be incurred until the goods or products are finally sold.
“(d) Credit
for excise tax on goods actually exported. — When goods locally
produced or manufactured are removed or actually exported without
returning to the Philippines, whether so exported in their original
state or as ingredients or parts of any manufactured goods as products,
any excise tax paid thereon shall be credited or refunded upon
submission of the proof of actual exportation and upon receipt of
corresponding foreign exchange payment: Provided, That the excise tax
on mineral products, except coal and coke, imposed under Section 151,
shall not be creditable or refundable even if the mineral products are
actually exported.”
Sec. 9. Section 121 of the National Internal
Revenue Code is hereby renumbered and amended to read as follows:
“SEC.
138. Distilled spirits. — On distilled spirits,
there shall be collected, subject to the provisions of Section 130 of
this Code, specific taxes as follows:
“(a)
If produced from sap of nipa, coconut, cassava,
camote or buri palm or from the juice, syrup or sugar of the cane,
provided such materials are produced commercially in the country where
they are processed into distilled spirits, per proof liter three pesos
and twenty centavos: Provided, That if produced in a pot still or other
similar primary distilling apparatus by a distiller producing not more
than 100 liters a day, containing not more than fifty percent of
alcohol by volume, per proof liter one peso;
“(b) If
produced from raw materials other than those enumerated in the
preceding paragraph, per proof liter, twenty-five pesos; and
“(c)
Medicinal preparations, flavoring extracts, and all other preparations,
except toilet preparations, of which, excluding water, distilled
spirits form the chief ingredient, shall be subject to the same tax as
such chief ingredient.
“This
tax shall be proportionally increased for any strength of the spirits
taxed over proof spirits, and the tax shall attach to this substance as
soon as it is in existence as such, whether it be subsequently
separated as pure or impure spirits, or transformed into any other
substance either in the process of original production or by any
subsequent process.
“‘Spirits or distilled spirits’
is the substance known as ethyl alcohol, ethanol or spirit of wine,
including all dilutions, purifications and mixtures thereof, from
whatever sources by whatever process produced and shall include whisky,
brandy, rum, gin and vodka, and other similar products or
mixtures.
“‘Proof spirits’ is liquor
containing 1/2 of its volume of alcohol of a specific gravity of seven
thousand nine hundred and thirty-nine ten thousand (0.7939) at fifteen
degrees centigrade. A proof liter means a liter of proof spirits.”
Sec. 10. Section 123 of the National Internal
Revenue Code is hereby renumbered and amended to read as follows:
“SEC.
139. Wines. — On wines, there shall be collected per
liter of volume capacity, the following taxes;
“(a)
Sparkling wines regardless of proof, sixteen pesos;
“(b) Still
wines containing fourteen percent of alcohol by volume or less, one
peso and;
“(c) Still
wines containing more than fourteen percent of alcohol by volume, four
pesos.
“Fortified
wines containing more than twenty-five percent of alcohol by volume
shall be taxed as distilled spirits. Fortified wines shall mean natural
wines to which distilled spirits are added to increase their alcohol
strength.”
Sec. 11. Section 124 of the National Internal
Revenue Code is hereby renumbered and amended to read as follows:
“SEC.
140. Fermented liquor. — There shall be levied,
assessed and collected an ad valorem tax equivalent to thirty-seven
percent (37%) of the brewer’s wholesale price, excluding the ad valorem
tax imposed under this section and the value added tax imposed under
Title IV, on beer, lager beer, ale, porter and other fermented liquors
except tuba, basi, tapuy and similar domestic fermented liquors, but in
no case shall the sum total of the ad valorem tax and value-added tax
be less than P1.00 per regular 320 ml. bottle.”
Sec. 12. Section 126 of the National Internal
Revenue Code is hereby renumbered and amended to read as
follows:
“SEC.
142. Cigar and cigarettes — (a) Cigars. — There
shall be levied, assessed and collected on cigars an ad valorem tax of
five percent (5%) of the manufacturer’s or importer’s registered
wholesale price.
“(b)
Cigarettes packed in thirties. — There shall be levied, assessed and
collected on cigarettes packed on thirties an ad valorem tax of fifteen
percent (15%) of the manufacturer’s registered wholesale price.
“(c)
Cigarettes packed in twenties. — There shall be levied, assessed and
collected on cigarettes packed on twenties an ad valorem tax at the
rates prescribed below based on the manufacturer’s registered wholesale
price:
“(1)
On locally manufactured cigarettes bearing a foreign
brand, fifty percent (50%): Provided, That this rate shall apply
regardless of whether or not the right to use or title to the foreign
brand was sold or transferred by its owner to the local manufacturer.
Whenever it has to be determined whether or not the cigarette bears a
foreign brand, the listing of brands manufactured in foreign countries
appearing in the current World Tobacco Directory shall govern.
“(2) On other
locally manufactured cigarettes, forty percent (40%).
“Duly
registered or existing brands of cigarettes packed in twenties shall
not be allowed to be packed in thirties.
“When the existing registered
wholesale price, including tax, of cigarettes packed in twenties does
not exceed P3.60 per pack the rate for cigarettes packed in thirties
shall apply.
“(d)
Imported cigarettes. — If the cigarettes are of
foreign manufacture, regardless of the contents per pack there shall be
levied, assessed and collected an ad valorem tax of sixty-five percent
(65%) of the importer wholesale price.
“For the purpose of this
section, ‘manufacturer’s or importer’s registered wholesale price’
shall include the ad valorem tax imposed in paragraphs (a), (b), (c) or
(d) hereof and the amount intended to cover the value-added tax imposed
under Title IV of this Code.”
Sec. 13. Section 129 of the National Internal
Revenue Code is hereby renumbered and amended to read as follows:
“SEC.
145. Manufactured oils and other fuels. — There
shall be collected on refined and manufactured mineral oils and motor
fuels, the following excise taxes which shall attach to the goods
hereunder enumerated as soon as they are in existence as such:
“(a)
For products subject to specific tax only:
“(1)
Lubricating oils and greases including not
limited to basestock for lube oils and greases, high vacuum
distillates, aromatic extracts and other similar preparations, and
additives for lubricating oils and greases whether such additives are
petroleum based or not, per liter of volume or capacity, four pesos and
fifty centavos (P4.50): Provided, however, That the excise taxes paid
on the purchased feedstock (bunker) used in the manufacture of
excisable articles and forming part thereof shall be credited against
the excise tax due therefrom: Provided, further, That lubricating oils
and greases produced from basestocks and additives on which the
specific tax has already been paid, shall no longer be subject to
specific tax;
“(2)
Processed gas, per liter of volume capacity,
five centavos;
“(3) Waxes
and petrolatum per kilogram, three pesos
and fifty centavos; and
“(4) On
denatured alcohol to be used for motive
power, per liter of volume capacity, five centavos: Provided, That
unless otherwise provided by special laws, if denatured alcohol is
mixed with gasoline, the excise tax on which has already been paid,
only the alcohol content shall be subject to the tax herein prescribed.
For purposes of this subsection, the removal of denatured alcohol of
not less than one hundred eighty degrees proof (ninety percent absolute
alcohol) shall be deemed to have been removed for motive power, unless
shown otherwise.
“(b)
For products subject to ad valorem tax
only:
Ad Valorem
Tax Rate
“(1) Naphtha,
gasoline and
other similar products of
distillation; and aviation
turbo jet fuel
48%
“(2) Fuel oil,
commercially
known as diesel fuel oil,
and on similar fuel oils
having more or less the
same generating power;
kerosene, liquified petro-
leum gas; asphalts; and
thinners 24%
“(3) Fuel oil,
commercially
known as bunker fuel and
on similar fuel oils having
more or less the same
generating
power 0%
“The
ad valorem tax imposed in this paragraph shall be based on the
company take or netback on the product as approved by the Energy
Regulatory Board including the said ad valorem tax.”
Sec. 14. Section 135 of the National Internal
Revenue Code is hereby renumbered and amended to read as follows:
“SEC.
148. Saccharine. — There shall be collected on
saccharine, sodium saccharine and all its derivatives on salts of
saccharine and other artificial sweetening agents, a tax of sixty pesos
(P60) per kilogram.”
Sec. 15. Section 135-A of the National Internal
Revenue Code is hereby renumbered and amended to read as follows:
“SEC.
149. Automobiles. — There shall be levied,
assessed and collected an ad valorem tax on automobiles based on the
manufacturer’s or importer’s selling price; net of excise and
value-added tax, in accordance with the following schedule:
“Engine
displacement (in cc)
Gasoline
Diesel Tax Rate
“ up to
1600 up to
1800 15%
“1601 to 2000
1801 to 2300
35%
“2001 to 2700
2301 to 3000
50%
“2701 or over 3001 or over 100%
Provided, That in the case of imported automobiles not for sale, the
tax imposed herein shall be based on the total value used by the Bureau
of Customs in determining tariff and customs duties, including customs
duty and all other charges, plus (10%) of the total thereof.
Sec. 16. Paragraphs (1) (a), (b) and (g) of
Section 163 of the National Internal Revenue Code are hereby renumbered
and amended to read as follows:
“SEC.
150. Non-essential goods. — There shall be
levied, assessed and collected a tax equivalent to 20% based on the
wholesale price or the value of importation used by the Bureau of
Customs in determining tariff and customs duties; net of excise tax and
value-added tax, of the following goods:
“(a)
All goods commonly or commercially known as
jewelry, whether real or imitation, pearls, precious and semi-precious
stones and imitations thereof; goods made of, or ornamented, mounted or
fitted with, precious metals or imitations thereof or ivory (not
including surgical and dental instruments, silver-plated wares, frames
or mountings for spectacles or eyeglasses, and dental gold or gold
alloys and other precious metals used in filing, mounting or fitting of
the teeth); opera glasses and lorgnettes. The term ‘precious metals’
shall include platinum, gold, silver, and other metals of similar or
greater value. The terms ‘imitations thereof’ shall include platings
and alloys of such metals;
“(b) Perfumes
and toilet waters;
“(c) Yachts
and other vessels intended for pleasure
or sports.”
Sec. 17. Section s 129 and 132; Paragraph (b) of
Sec. 216, Section s 217, 218 and 219 of the National Internal Revenue
Code are hereby integrated, renumbered and amended to read as follows:
“SEC.
151. Mineral Products. — (a) Rates of Tax. —
There shall be levied, assessed and collected on mineral, mineral
products and quarry resources, excise tax as follows:
“(1)
On coal and coke, a tax of ten pesos (P10.00)
per metric ton.
“(2) On all
non-metallic minerals and quarry
resources, a tax of three percent (3%) based on the actual market value
of the annual gross output thereof at the time of removal, in the case
of those locally extracted or produced; or the value used by the Bureau
of Customs in determining tariff and customs duties, net of excise tax
and value-added tax in the case of importation.
“(3) On all
metallic minerals, a tax of five percent
(5%) based on the actual market value of the gross output thereof at
the time of removal, in the case of those locally extracted or
produced; or the value used by the Bureau of Customs in determining
tariff and customs duties, net of excise tax and value-added tax, in
the case of importation.
“(4) On
indigenous petroleum, a tax of twenty-two
percent (22%) of the fair international market price thereof, on the
first taxable sale, such tax to be paid by the buyer or purchaser
within 15 days from the date of actual or constructive delivery to the
said buyer or purchaser. The phrase ‘first taxable sale, barter,
exchange or similar transaction’ means the transfer of indigenous
petroleum in its original state to a first taxable transferee. The fair
international market price shall be determined in consultation with an
appropriate government agency.
“For the purpose of this
subsection, `indigenous petroleum’ shall
include locally extracted mineral oil, hydrocarbon gas, bitumen, crude
asphalt, mineral gas and all other similar or naturally associated
substance with the exception of coal, peat, bituminous shale and/or
stratified mineral deposits.
“(b)
For purposes of this section, the term -
“(1)
‘Gross output’ shall be interpreted as the
actual market value of minerals or products, or of bullion from each
mine or mineral lands operated as a separate entity without any
deduction from mining, milling, refining, (including all expenses
incurred to prepare the said minerals or mineral products in the
marketable state) as well as transporting, handling, marketing, or any
other expenses: Provided, That if the minerals or mineral products are
sold or consigned abroad by the lessee or owner of the mine under
C.I.F. terms, the actual cost of ocean freight and insurance shall be
deducted; Provided, however, That in the case of mineral concentrate
not traded in commodity exchanges in the Philippines or abroad such as
copper concentrate, the actual market value shall be the world price
quotations of the refined mineral products content thereof prevailing
in the said commodity exchanges, after deducting the smelting, refining
and other charges incurred in the process of converting the mineral
concentrates into refined metal traded in those commodity exchanges.
“(2)
‘Minerals’ shall mean all naturally occurring
inorganic substances (found in nature) whether in solid, liquid or
gaseous, or any intermediate state.
“(3) ‘Mineral
products’ shall mean things produced
and prepared in a marketable state by simple treatment processes such
as washing or drying, but without undergoing any chemical change or
process or manufacturing by the lessee, concessionaire or owner of
mineral lands.
“(4) ‘Quarry
resources’ shall mean any common stone
or other common mineral substances as the Director of Bureau of Mines
and Geo-Sciences may declare to be quarry resources such as but not
restricted to marl, marble, granite, volcanic cinders, basalt, tuff and
rock phosphate: Provided, That they contain no metal or metals or other
valuable minerals in economically workable quantities.
“(c)
Time, manner and place of payment of excise tax
on mineral and mineral products. — Unless otherwise provided, the
excise tax on minerals and mineral products shall be due and payable
upon removal of the minerals or mineral products or quarry resources
from the locality where mined or upon removal from customs custody in
the case of importations.
“Any person liable to pay the
excise tax on locally produced or
extracted mineral, mineral products or quarry resources shall, before
removal of such products file, in duplicate, a return setting forth the
quantity and the actual market value of the mineral or mineral products
to be removed and pay the excise taxes due thereon to the Collection
Agent, or the Treasurer of the city or municipality of the place where
the mine is located except as herein below provided.
“However, the output of the mine
may be removed from such locality
without the prepayment of such excise taxes if the lessee, owner, or
operator of the mining claim shall file a bond in the form and amount
and with such sureties as the Commissioner may require, conditioned
upon the payment of such excise taxes. It shall be the duty of every
lessee, owner or operator to make a true and complete return in
duplicate setting forth the quantity and the actual market value of the
minerals or mineral products or quarry resources removed during such
calendar quarter, of the balance, if any, in cases where payments are
made upon removal, and pay the excise taxes due thereon within 20 days
after the end of such quarter to the Collection Agent, or the Treasurer
of the city or municipality of the place where the mine is located.
“In the case of indigenous
petroleum, the tax due thereon shall be paid
by the buyer or purchaser within 15 days from the date of actual or
constructive delivery to the said buyer or purchaser.”
Sec. 18. Section 141 of the National Internal
Revenue Code is hereby renumbered and amended to read as
follows:
“SEC.
157. Removal of articles after payment of tax.
— When the tax has been paid on articles or products subject to excise
tax the same shall not thereafter be stored or permitted to remain in
the distillery, distillery warehouse, bonded warehouse, or other
factory or place where produced. However, upon prior permit from the
Commissioner, oil refineries and/or companies may store or deposit
tax-paid petroleum products and commingle the same with its own bonded
products. Imported petroleum products may be allowed to be withdrawn
from the customs custody without any repayment of excise tax which
products have been commingled with the tax-paid bonded products of the
importer himself after securing a prior permit from the Commissioner of
Internal Revenue: Provided, That withdrawals shall be taxed and
accounted for on a ‘first-in, first-out basis.’“
Sec. 19. Section 180 of the National Internal
Revenue Code is hereby renumbered and amended to read as follows:
“SEC.
237. Registration of name or style with the
revenue district officer or collection agent. — Every person, other
than persons required to be registered under the provisions of Section 107, engaged in any business shall, or on before the the commencement
of his business, or whenever he transfers to another revenue district,
register with the revenue district officer concerned within 10 days
from commencement of business or transfer. In cities or municipalities
where no revenue district officer is stationed, such person shall
register with the collection agent. The registration shall
contain his name or style, place of residence, business, the place
where such business is carried on, and such other information as may be
required by the Commissioner in the form prescribed therefor. In case
of a firm, the names and residences of the various persons constituting
the same shall also be registered. The Commissioner, after taking into
consideration the volume of sales, financial condition and other
relevant factors, may require the registrant to guarantee the payment
of his taxes by way of advance payment, or the posting or filing of a
security, guarantee or collateral acceptable to the Commissioner.”
Sec. 20. Section 181 of the National Internal
Revenue Code is hereby renumbered and amended to read as follows:
“SEC.
238. Issuance of receipts or sales or
commercial invoices. — All persons subject to an internal revenue tax
shall for each sale or transfer or merchandise or for services rendered
valued at P25 or more, issue receipts, or sales or commercial invoices,
prepared at least in duplicate, showing the date of transaction,
quantity, unit cost and description of merchandise or nature of
service: Provided, That, in the case of sales, receipts or transfers in
the amount of P100 or more, or, regardless of amount, where the sale or
transfer is made by persons subject to value-added tax to other persons
also subject to value-added tax; or, where the receipt is issued to
cover payment made as rentals, commissions, compensations or fees,
receipts or invoices shall be issued which shall show the name,
business style, if any, and address of the purchaser, customer, or
client. The original of each receipt or invoice shall be issued to the
purchaser, customer or client at the time the transaction is effected,
who, if engaged in business or in the exercise of profession, shall
keep and preserve the same in his place of business for a period of 3
years from the close of the taxable year in which such invoice or
receipt was issued, while the duplicate shall be kept and preserved by
the issuer, also in his place of business, for a like period.
“The Commissioner may, in
meritorious cases, exempt any person subject
to an internal revenue tax from compliance with the provisions of this
section.”
Sec. 21. Section s 122, 130, 134; Section s 157 to
161, inclusive, paragraphs (1) (c) to (f), inclusive, and (h) to (q);
and paragraphs (2) to (4) of Section 163; Section s 164 to 170,
inclusive; Section s 174, 176, 179; Section s 215; paragraph (a) of
Sec. 216; Section s 222, 224 and 225, Sec. 230 to 238, inclusive,
Section s 241, 279, 280, 297, 323 and 234 all of the National Internal
Revenue Code are hereby repealed.
Sec. 22. The imposition of occupation fee and
rentals provided in Section s 215 and 216(a) respectively, of the
National Internal Revenue Code shall henceforth be collected by the
municipality or city where the mining claim is situated. The
disposition of the collection shall continue to be in accordance with
the provision of said Section s 215 and 216(a).
The entire provisions of Chapter V, Title VIII of the National Internal
Revenue Code governing the charges of forest products, including
Sec. 297 of the same Code are hereby transferred to and shall form
part of Presidential Decree No. 705, as amended, otherwise known as the
Revised Forestry Code of the Philippines. All references to the Bureau
of Internal Revenue, Commissioner of Internal Revenue and Ministry of
Finance in the said Chapter V shall henceforth refer to the Forest
Management Bureau, Director of Forest Management Bureau and Secretary
of Environment and Natural Resources, respectively.
Sec. 23. The following sections of the National
Internal Revenue Code and all references thereto are renumbered as
follows:
Present
Number New Number
Sec. 27
Sec. 26
Sec. 28
Sec. 27
Sec. 29
Sec. 28
Sec. 30
Sec. 29
Sec. 31
Sec. 30
Sec. 32
Sec. 31
Sec. 33
Sec. 32
Sec. 34
Sec. 33
Sec. 35
Sec. 34
Sec. 36
Sec. 35
Sec. 37
Sec. 36
Sec. 38
Sec. 37
Sec. 39
Sec. 38
Sec. 40
Sec. 39
Sec. 41
Sec. 40
Sec. 42
Sec. 41
Sec. 43
Sec. 42
Sec. 44
Sec. 43
Sec. 45
Sec. 44
Sec. 46
Sec. 45
Sec. 47
Sec. 46
Sec. 48
Sec. 47
Sec. 49
Sec. 48
Sec. 50
Sec. 49
Sec. 51
Sec. 50
Sec. 52
Sec. 51
Sec. 53
Sec. 52
Sec. 54
Sec. 53
Sec. 55
Sec. 54
Sec. 56
Sec. 55
Sec. 57
Sec. 56
Sec. 58
Sec. 57
Sec. 59
Sec. 58
Sec. 60
Sec. 59
Sec. 61
Sec. 60
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Sec. 61
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Sec. 62
Sec. 64
Sec. 63
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Sec. 64
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Sec. 69
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Sec. 70
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Sec. 76
Sec. 77
Sec. 78
Sec. 79
Sec. 80
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Sec. 82
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Sec. 74
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Sec. 75
Sec. 86
Sec. 76
Sec. 87
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Sec. 88
Sec. 78
Sec. 89
Sec. 79
Sec. 90
Sec. 80
Sec. 91
Sec. 81
Sec. 92
Sec. 82
Sec. 93
Sec. 83
Sec. 94
Sec. 84
Sec. 95
Sec. 85
Sec. 96
Sec. 86
Sec. 97
Sec. 87
Sec. 98
Sec. 88
Sec. 99
Sec. 89
Section 100
Sec. 90
Section 101
Sec. 91
Section 102
Sec. 92
Section 103
Sec. 93
Section 104
Sec. 94
Section 105
Sec. 95
Section 106
Sec. 96
Section 107
Sec. 97
Section 108
Sec. 98
Section 171
Section 113
Section 172
Section 114
Section 173
Section 115
Section 175
Section 116
Sec. 227
Section 117
Sec. 240
Section 118
Sec. 220
Section 119
Sec. 221
Section 120
Sec. 223
Section 121
Sec. 226
Section 122
Sec. 228
Section 123
Sec. 229
Section 124
Section 162
Section 125
Section 109
Section 126
Section 110
Section 127
Section 111
Section 128
Section 112
Section 129
Section 113
Section 130
Section 114
Section 131
Section 115
Section 132
Section 116
Section 133
Section 117
Section 134
Section 118
Section 135
Section 119
Section 136
Section 120
Section 137
Section 121
Section 138
Section 123
Section 139
Section 124
Section 140
Section 125
Section 141
Section 126
Section 142
Sec. 239
Section 143
Section 127
Section 144
Section 128
Section 145
Section 131
Section 146
Section 133
Section 147
Section 135
Section 148
Section 135-A
Section 149
Section 163(1)
Section 150
(a), (b) and (g)
Section 129, 132,
216 (b), 217,
218, and 219 Section 151
Section 136
Section 152
Section 137
Section 153
Section 138
Section 154
Section 139
Section 155
Section 140
Section 156
Section 141
Section 157
Section 142
Section 158
Section 143
Section 159
Section 144
Section 160
Section 145
Section 161
Section 146
Section 162
Section 147
Section 163
Section 148
Section 164
Section 149
Section 165
Section 150
Section 166
Section 151
Section 167
Section 152
Section 168
Section 153
Section 169
Section 154
Section 170
Section 155
Section 171
Section 156
Section 172
Section 186
Section 173
Section 187
Section 174
Section 188
Section 175
Section 189
Section 176
Section 192
Section 177
Section 191
Section 178
Section 190
Section 179
Section 193
Section 180
Section 194
Section 181
Section 195
Section 182
Section 196
Section 183
Section 197
Section 184
Section 198
Section 185
Section 199
Section 186
Sec. 200
Section 187
Sec. 201
Section 188
Sec. 202
Section 189
Sec. 203
Section 190
Sec. 204
Section 191
Sec. 205
Section 192
Sec. 206
Section 193
Sec. 207
Section 194
Sec. 208
Section 195
Sec. 209
Section 196
Sec. 210
Section 197
Sec. 211
Section 198
Sec. 212
Section 199
Sec. 213
Sec. 200
Sec. 214
Sec. 201
Sec. 264
Sec. 202
Sec. 268
Sec. 203
Sec. 246
Sec. 204
Sec. 253
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Sec. 272
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Sec. 233
Sec. 274
Sec. 234
Sec. 275
Sec. 235
Sec. 276
Sec. 236
Section 180
Sec. 237
Section 181
Sec. 237
Section 182
Sec. 238
Section 183
Sec. 248
Section 184
Sec. 240
Section 185
Sec. 241
Section 177
Sec. 242
Section 178
Sec. 243
Sec. 277
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Sec. 278
Sec. 245
Sec. 281
Sec. 246
Sec. 282
Sec. 247
Sec. 283
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Sec. 249
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Sec. 286
Sec. 322
Sec. 287
Sec. 24. The provisions of the National Internal
Revenue Code as renumbered under this Executive Order are hereby
rearranged according to the following Titles:
Title
Title I — Organization and
Function of Bureau
Chapter
Part Section
Constrained
— Section s 1 to 9
Title II — Tax on Income
Chapter 1
— Sec. 20
Chapter 2
— Section s 21 to 23
Chapter 3
— Section s 24 to 26
Chapter 4
— Section s 27 to 36
Chapter 5
— Section s 37 to 43
Chapter 6
— Section s 44 to 52
Chapter 7
— Section s 53 to 59
Chapter 8
— Section s 60 to 66
Chapter 9
— Section s 67 to 70
Chapter 10
— Section s 71 to 76
Title III — Tax on Transfer of
Property
Chapter 1
Section s 77 to 90
Chapter 2
Section s 91 to 98
Title IV — Value-Added Tax
Chapter 1
Section s 99 to 106
Chapter 2
Section s 107 to 111
Title V — Other Percentage
Taxes
Section s 112
to 125
Title VI — Excise Taxes on
Certain Goods
Chapter 1
Section s 126 to 129
Chapter 2
Section s 130 to 137
Chapter 3
Section s 138 to 140
Chapter 4
Section s 141 to 144
Chapter 5
Section 145
Chapter 6
Section s 146 to 150
Chapter 7
Section 151
Chapter 8
Section s 152 to 172
Title VII — Documentary
Stamp Tax
Section 173-201
Title VIII — Remedies
Chapter 1
Section s 202 to 204
Chapter 2
Section s 205 to 228
Chapter 3
Section s 229 to 231
Title IX — Compliance
Requirements
Chapter 1
Section s 232 to 236
Chapter 2
Section s 237 to 244
Chapter 3
Section s 245 to 246
Title X — Statutory
Offenses and Penalties
Chapter 1
Section s 247 to 251
Chapter 2
Section s 252 to 267
Chapter 3
Section s 268 to 272
Chapter 4
Section s 273 to 281
Title XI — Allotment of
Internal Revenue
Chapter 1
Section s 282 to 284
Chapter 2
Section s 285 to 286
Title XII — Repealing
Provisions
Chapter 1
Sec. 287
Sec. 25. Transitory provisions. — (a) All
VAT-registered persons shall be allowed transitional input taxes which
can be credited against output tax in the same manner as provided in
Section s 104 of the National Internal Revenue Code as follows:
1)
The balance of the deferred sales tax credit
account as of December 31, 1987 which are accounted for in accordance
with regulations prescribed therefor;
2) A
presumptive input tax equivalent to 8% of the
value of the inventory as of December 31, 1987 of materials and
supplies which are not for sale, the tax on which was not taken up or
claimed as deferred sales tax credit; and
3) A
presumptive input tax equivalent to 8% of the
value of the inventory as of December 31, 1987 as goods for sale, the
tax on which was not taken up or claimed as deferred sales tax credit.
Tax
credit prescribed in paragraphs (2) and (3) above shall be allowed
only to a VAT-registered person who files an inventory of the goods
referred to in said paragraphs as provided in regulations.
(b) Any unused tax credit certificate issued prior to
January 1, 1988 for excess tax credits which are applicable against
advance sales tax shall be surrendered to, and replaced by the
Commissioner with new tax credit certificates which can be used in
payment for value-added tax liabilities.
(c) Any person already engaged in business whose
gross sales or receipts for a 12-month period from September 1, 1986 to
August 1, 1987, exceed the amount of P200,000, or any person who has
been in business for less than 12 months as of August 1, 1987 but
expects his gross sales or receipts to exceed P200,000 on or before
December 31, 1987, shall apply for registration on or before October
29, 1987.
Sec. 26. The funds needed to carry out the
provisions of this Executive Order shall be drawn from the
appropriations authorized for the Bureau of Internal Revenue for CY
1987. Any deficiency shall be covered by the contingency fund provided
by the current General Appropriations Act. For CY 1988 and thereafter,
such sums shall be included in the annual General Appropriations Act.
Sec. 27. The Secretary of Finance, upon
recommendation of the Commissioner of Internal Revenue, shall
promulgate the rules and regulations to effectively implement this
Executive Order.
Sec. 28. The Commissioner of Internal Revenue
shall codify and consolidate all internal revenue laws embodied in the
present National Internal Revenue Code, as amended by various Executive
Orders, and other issuances, and cause the publication thereof.
Sec. 29. The provisions of any law, whether
general or special, rules and regulations and other issuances or parts
thereof which are inconsistent with this Order are hereby repealed,
amended or modified accordingly.
Sec. 30. This Order shall take effect on January
1, 1988: Provided, That the provisions of Sec. 25 (c) hereof shall
take effect immediately upon approval of this Order.
DONE in the City of Manila,
this 25th day of July, in the year of Our Lord, nineteen hundred and
eighty-seven.
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